ACC Ltd. share price target

to see a structural recovery in its operating parameters (EBITDA), which were 18% belowconsensusevenasEBITDAwas36%belowours. 8 ThoughACCdeliveredsavingsinpowerandfuelcostsandotherexpenses,thesewere...

ACC reported yet another weak quarter, with EBITDA/t at Rs 360 (20% YoY, -23% QoQ). Volume growth (6.0 mT, 4.2% YoY) resumed after four successive quarters of decline. Realisations slipped (Rs 4,331/t, -2.5% YoY, 2.4% QoQ) because of volume pressure in all markets (ex-South).

ACC's Q4CY15 net sales was in-line with our estimate though the cement volumes came marginally higher (+4.3% YoY against estimate of +3%) and realisation a tad lower (down 1.3% YoY vs. expectation flat YoY).

ACC has reported a weak and below estimate operating performance, as operating profit stood at Rs2.16bn vs. our estimate of Rs2.86bn. An unexpected increase in staff costs (+21% yoy and +40% qoq) has been the prime reason for subdued performance. ACC's endeavour towards downsizing surplus manpower led to a non-recurring severance expenditure of Rs320mn, which inflated employee costs. EBITDA/tonne came in at Rs405 as against Rs303 and Rs461 seen during 4QCY14 and 3QCY15, respectively. Sales volume grew by 4% yoy to 6.0mnT. Upcoming capacities in Eastern region are slightly delayed and expected to be commissioned by the end of 2QCY16E, which will...

ACC reported another weak quarter, with EBITDA/t at Rs 470 (Rs 515 if Jan-Jun DMF contribution is adjusted). Realisations did not improve materially (Rs 4,438, up ~1.2% QoQ, -1.8% YoY), while volumes declined marginally (-0.2% YoY).

8 Flat yoy volume growth is a disappointment, especially when its comparable peer UltraTechhasdelivered5%yoydomesticvolumegrowth. 8 We don't see any immediate trigger for ACC. The only nearterm one is the...

Tepid realizations along with higher other expenditures (due to provisioning of Rs380mn pertaining to DMF provision under MMDR) led to sluggish operating performance. EBITDA/ tonne came in at Rs461 as against Rs537 and Rs444 seen during 3QCY14 and 2QCY15, respectively. Notably, employee cost is down by ~13% yoy owing to reversal of ~Rs200mn....

Prices continue to remain weak

ACC reported weak nos (EBITDA/t Rs 451, -26.6% YoY, -35.2% QoQ) as it contended with weak volumes (6.2 mT, -2.4% YoY), poor pricing (Rs 4,285/t, -1.2% YoY, -3.3% QoQ) and a reversion of costs to historical trend ( 2.9% YoY/2.5% QoQ) after moderation in 1QCY15.