ACC Ltd. share price target

We value ACC at 12x its CY22E EV/EBITDA to arrive at a TP of Rs 2,710/share, implying an upside of 21% from the CMP. We maintain our BUY rating on the stock.

ACC’s Q3CY21 EBITDA at Rs7.1bn (up 6% YoY) was broadly in line with consensus estimates. Total cost/te increased 4.6% QoQ (6.8% YoY) primarily led by higher fuel cost, and packing materials and maintenance costs. Blended EBITDA/te (including RMC) grew 7% YoY and declined 15% QoQ to Rs1,060/te (ISec: Rs977/te). While investor concern around sharp cost increases seem valid, industry has demonstrated strong pricing resilience in the past. Our recent channel checks suggest companies have increased prices by Rs15-20/bag across regions.

Its expansion plans are largely on track. It is likely to commission clinker/grinding capacity of 2.7mtpa/2.6mtpa by 1HCY22E and additional grinding capacity of 2.2mtpa by 1HCY23E. This should drive 9% volume CAGR over CY20-23E. Cost saving efficiencies (Project Parvat) and master supply agreement (MSA) with ACEM are yielding results. We maintain our CY21-23E EPS estimates and reiterate our Buy rating with a TP of INR2,692. Revenue/EBITDA/adjusted PAT increased by 6%/6%/12% YoY in 3QCY21 to INR37.5b/INR7.1b/INR4.5b and was -1%/+4%/+6% v/s our estimates....

vaccination drives & increased government spending may trigger demand to recover rapidly. However, given the current scenario with sharpened fuel costs, we remain cautious on the stock & retain our HOLD with revised target price of Rs. 2,460 based on 11.0x CY22E EV/EBITDA. Topline impact less severe as compared to Q2CY20 For Q2CY21 revenue climbed 49.3% YoY to Rs. 3,885cr (-9.5% QoQ), with cement sales volume of 6.8mt (44.0% YoY). The Ready Mix Concrete business surged 309.9% YoY to Rs. 255cr (-29.1% QoQ) with RMX sales volume of 0.58m cubic meter (293.0% YoY)....

ACC'S Q2CY21 EBITDA is 23%/ 21% higher than our/consensus estimate. Beat in the number is led by volume and realization. Volume in the quarter has decreased by 15% QoQ versus estimate of -21% QoQ. Cement Realization increased by 8% QoQ and was supported by sale of premium cement. We have factored beat in Q2 result in CY21/22 financials and this has resulted in increase in the EBITDA by 5%/8% (exhibit 10). After covid 2 related lockdown, ACC has seen pick up in the volume in June-21 and profitability (EBITDA/t) led by realization has increased sharply. We value the stock at...

We value ACC at 11x its CY22E EV/EBITDA to arrive at TP of Rs 2,490/share, implying an upside of 16% from the CMP.

ACC has a strong balance-sheet with debt free status. However, it remains a laggard in terms of efficiency and operating margins vs. peer companies The ongoing capex of | 3500 crore would increase its capacity to 39.3 MT by H1CY22E. The 1.1 MT GU in Sindri has already been commissioned,...

ACC's 2QCY21 result surprised positively on strong cost control. Moreover, coupled with a better pricing environment, this led to EBITDA/t of INR1,279 the highest since CY10 despite higher energy costs. ACC's Central India expansion should be commissioned in 2HCY22, potentially driving a 9% volume CAGR over CY2123E. We expect costs to remain in check, supported by a master supply agreement (MSA) with Ambuja as well as supply chain efficiencies. We raise our CY21/CY22 EPS...

Current valuations at 7.7x CY22E EV/EBITDA are attractive and we give a BUY rating on the stock with a target price of Rs.2230/share.

Even with strong balance sheet, cash flows, government spends, cost efficiency etc., recovery is skeptical with risk of rising fuel prices. Hence, we maintain cautious view on the stock and rate it a HOLD with a revised TP of Rs. 1,974 based on 8.7x CY22E EV/EBITDA. Topline backed by strong demand and volumes Q1CY21 revenue grew 22.6% YoY to Rs. 4,292cr (+3.6% QoQ), aided by strong volume growth in Cement at 21.6% YoY to 8.0MT (+3.4% QoQ) driven by robust demand. The Ready Mix Concrete business de-grew 7.7% YoY to Rs. 313cr (+59.2% QoQ) as sales...