ACC Ltd. share price target

2QCY17 results are ACC's best since 2QCY12. However, its costs remain one of the highest in the industry, led by legacy operations. With no capacity addition scheduled, volume growth will taper after 1HCY18, as the expansion in the East gets factored in. Valuations at 15.6/12.1x CY17/18E EV/EBITDA remain expensive, especially given low return ratios (~15% RoE/RoCE in CY18E). We remain cautious (TP: Rs 1,459, 10x June 2019 EBITDA, US112/t) ACCs numbers were inline (EBITDA/t at Rs 704/t vs estimated Rs 699/t, 7.7% YoY, 48.0% QoQ). The company witnessed double-digit volume growth (6.74 mT, 10.1% YoY) for the first time since 3QCY11, led by capacity addition in the East (4 mTPA, commissioned by 3QCY16). Strong pricing (Rs 4,509/t, 5.7% YoY, 5.7% QoQ) also aided growth, as overall costs remained flattish QoQ (Rs 3,805/t, 5.3% YoY). Other operating income surprised (Rs 1.4bn, ~2x YoY), driving the earnings beat (Rs 3.2bn, 35.3% YoY, 52.1% QoQ, est Rs 2.85bn)

ICICI Securities Ltd | Retail Equity Research ACC reported a good set of Q2CY17 numbers. The topline beat was led by 10.1% YoY increase in volumes to 6.7 MT (vs. I-direct estimate of 6.5 MT) and 6.2% YoY increase in realisation to | 4,915/t (vs. Idirect estimate of | 4900/t) Revenues increased 16.9% YoY to | 3,312.5 crore (above I-direct estimate of | 3,172.9 crore) led by 10.1% YoY increase in volumes due to commissioning of Jamul plant (10% of overall capacity) and better pricing scenario across regions...

Second, the patterns in inventory gainsahead of GST on-going quarterare unclear. Adding to that, energy and freight handling weighed on operating costs. Yet headline EBITDA was way ahead of our expectations. And finally, the spillover effect of capacity utilization moving up 6 percentage points, helped net profit advance by a third. With EV/ton capturing the best-case...

Strong Performance on Better Volume and Firm Realizations ACC reported better-than-estimated performance in 2QCY17 with its EBITDA per tonne surpassing Rs700-mark for the first time in the last eight quarters and stood at Rs715 vs. our estimate of Rs684. Operating profit grew by 20% YoY and 45% QoQ to Rs4.95bn vs. our expectation of Rs4.65bn. Better-than-estimated sales volume growth (+10.1% YoY and +2.1% QoQ) and firm increase in average realizations (+6.7% YoY and +5.0% QoQ) aided operating performance. Notably, operating cost per tonne for cement rose by 3% YoY to Rs3,881 (flat on QoQ basis) mainly due to hardening of fuel prices and spike in transportation cost. However,...

ACC reported EBITDA of Rs4.95bn against our estimate of Rs4.4bn, primarily due to lower operating costs (Rs73/tonne below estimate). EBITDA/tn of Cement was Rs708 against our estimate of Rs654. Jamul and Sindri plants led to a strong 10.1% yoy volume growth. Sales volume was up 10.1% yoy to 6.74mt, in line with estimate of 6.73mt. Strong volume growth was driven by contribution from Jamul and Sindri plants in the East region....

Revenue rose by 17.65% to Rs. 3099.66 Cr in Q1CY17 when compared to the previous quarter. Also it rose by 7.9% when compared with Q1CY16.

ACCs numbers beat estimates marginally (EBITDA at Rs 476/t, our est was Rs 453, -13.6% YoY, 34.6% QoQ). Pricing declined 2.2% QoQ (Rs 4,265/t, 3.8% YoY), while new East capacities (~4 mTPA) helped it deliver a 3.8% volume growth (6.6 mT). These peak season numbers hardly inspire confidence.

ICICI Securities Ltd | Retail Equity Research ACC's Q1CY17 numbers were above our estimates due to a higherthan-expected topline. The beat on the topline was led by 3.8% YoY increase in volumes to 6.6 MT, which came in as a positive surprise against 15.0% YoY decline in pan-India production volumes in the first two months of CY17 as per core industry data Revenues increased 7.9% YoY to | 3,099.7 crore (above I-direct estimate of | 2,631.7 crore) led by 3.8% YoY increase in volumes to 6.6 MT (above I-direct estimate of 5.6 MT) due to commissioning of...

EBITDA, ACC reported Rs3.4 bn. With high volumes, fixed cost elements like indirect employee and other overheads were absorbed absorbed. Yet elements like shortage in flyash, procured through longer lead, led to 10% y/y and 3% q/q increase in freight cost. cost The trend in power and fuel...

ACC?s numbers exceeded the low expectations (EBITDA: Rs 296/t, Est: Rs 273, -13.5% YoY, -28.9% QoQ) as its P&F costs unexpectedly declined 7.8% QoQ. (Likely an year end adjustment, given sharp hikes in petcoke prices (67% of kiln fuel mix in 3QCY16)). Otherwise, it was business as usual as volumes declined 9.2% YoY (5.45 mTPA, lowest 4Q volumes since CY09), on the heels of an expansion which added ~3.5 mTPA capacity (in East).