ACC Ltd. share price target

23 April 2019 Volumes grew 5.5% YoY to 7.5mt (our INR40.5b). Operating margin came in at 13.5% (flat YoY, +0.45pp QoQ). During the quarter, receipt of Orders Giving Effect (OGE) to the CIT(A) orders for certain assessment years on disposal of certain appeals sanctioning income tax refunds resulted in interest income and reversal of provision for interest on income tax aggregating INR2.76b. The company has made provision of INR1.77b against this due to the uncertainty of its ultimate realisability. Net income of INR994.8m is included in other INR3.

ICICI Securities Ltd | Retail Equity Research ACC reported a mixed set of Q4CY18 numbers with revenues in line with estimates. However, it was a miss at the EBITDA level Revenues for Q3 grew 10.9% YoY to | 3788.6 crore (in line with Idirect estimate: | 3,750.4 crore) led by 8.4% YoY growth in volumes to 7.5 MT (vs. I-direct estimate: 7.4 MT), 2.3% YoY increase in blended realisation/tonne to | 5,051/t (vs. I-direct estimate: | 5,068/t) EBITDA margins, however, missed our estimates registering a decline of 66 bps to 10.1% (vs. I-direct estimate of 13.8%) mainly led...

ACC reported adjusted EBITDA of Rs5.1bn in Q4CY18 vs. our estimate of Rs5bn and OPM of 13.1% vs. our estimate of 13.2% on higher incentives. Sales volume was up 8.4%/8.3% yoy in Q4CY18/CY18 with capacity utilization of 89%/85%. Realization was up 2% yoy but down 1.8% qoq. Opex/ton was under control despite an increase in RM costs and higher pet coke/imported coal prices. OPM was up 141bps yoy and EBITDA/ton was at Rs618 vs. Rs581/Rs648 in Q4CY17/Q3CY18. cement grinding capacity of 3mt and 1mt, respectively. It plans to increase Tikaria, Uttar Pradesh (UP) capacity by 1.6mt and set up a 2.2mt unit capacity at another location in UP....

ACC intends to set up a greenfield unit in Katni, Madhya Pradesh (MP), with a clinker capacity of 3mt and a grinding capacity of 1mt. It also plans to set up a 1.6mt split grinding unit in Tikaria, Uttar Pradesh (UP), at the existing plant and a 2.2mt unit at another location in UP. It also aims to boost the grinding capacity of the Sindri plant in Jharkhand by 1.1mt. a capex of Rs30bn, which would be funded through internal accruals. In our view, this is a positive development as the company is currently operating at a utilization of 83% (all plants put together), and as a result it would have had only limited room to take advantage of volume growth opportunities in the next few years without a capacity expansion....

ACC's net profit for the quarter came in at Rs. 206cr as compared to Rs. 326cr QoQ. Total income for the quarter came in at Rs. 3,433 cr as compared to Rs. 3,116 cr in the corresponding quarter of CY 17, up 10.2% YoY and decreased 10.8% sequentially. EBITDA for the company stood at Rs. 443 cr vs. Rs. 416 cr YoY. EBITDA margin for the quarter stood at 12.9% vs 13.6% in the previous corresponding quarter. The fall in margin has been mainly due to the rise in logistics costs (because of higher fuel costs which also impacted packaging costs). Cement Business volume came at 6.55 MT higher by 9.9% compared to the...

ACC's Q3CY18 sales were in line with our forecast but profitability was below our expectation. Sales grew by 10.1% YoY to Rs33,640 mn driven by better than expected volumes of cement at 6.55 mn tonnes (+10% YoY). Even RMC sales volumes were higher by 12% YoY to 0.73 mn tonnes. However, EBITDA margins were 97bps lower than our estimate due to weaker than expected realizations. EBTIDA increased 5.8% YoY to Rs3,743 mn driven by higher volumes. Net profit grew 15.6% YoY to Rs2,067 mn . Looking ahead, we expect ACC's sales/EBITDA/net profit to grow at a CAGR of 10%/13%/18%, respectively, over CY17-19E. However, given an 18% stock price...

ACC Ltd Q3CY18 results Comment Revenue fell by 10.72% to Rs. 3363.96 Cr in Q3CY18 when compared to the previous quarter. On the other hand, it increased by 10.13% when compared with Q3CY17.

ACC Q3CY18 results were above our estimates. Revenues increased by 10.1% YoY to | 3,364 crore (above I-direct estimate of | 3,259.8 crore) led by 10.0% YoY increase in volumes to 6.6 mt (vs I-direct estimate of 6.4 mt). Realisations for the quarter remained flat YoY to |5136/t that also remained ahead of our estimates due better pricing environment in East & central regions added by rise in the share of value added premium products during the quarter. On the margin front, the EBITDA margin decreased 46 bps YoY to...

ACC reported revenue of ` 34.3bn (+10.2% YoY, -10.8% QoQ). Weak realization in the Eastern and Southern region (55.4% of ACC's capacity) resulted in blended realization increasing by modest 0.5% YoY to Rs4713/ton (-1.9% QoQ), lower than our expectation. However, the volume growth trajectory continued to remain strong, grey cement...

Strong volume growth and stable operating costs During Q3CY18, ACC delivered 10% YoY volume growth aided by strong demand mainly in east and south markets. However, realisation fell 1.7% QoQ amid aggressive competition and seasonal weakness. ACC's productivity improvement muted inflationary impact of slag, energy and diesel price inflation. Consolidated EBITDA/PAT growth of 8%/17% YoY came is lower than estimated, owing to higher than estimated other expenses. We believe ACC's focus on cost controls to keep cost inflation in check, going forward. While ACC's volume growth would moderate during CY19-20E due to lack of new...