ACC Ltd. share price target

Over the last few quarters, the company has experienced pressure from higher fuel costs, despite making reasonable efforts across digitalization and increasing capacity. With a cautious view, we maintain our HOLD rating on the stock with a rolled forward target price of Rs. 2,415 based on 9.5x CY23E EV/EBITDA. Better realised prices support topline growth Q4CY21 revenue climbed up 2.0% YoY to Rs. 4,226cr (+12.7% QoQ), on higher realisations (+4.6% YoY to Rs. 5,524/t) with better product mix, while cement sales...

We value ACC at 10.5x its CY23E EV/EBITDA to arrive at a TP of Rs 2,620/share, implying an upside of 22% from the CMP. We maintain our BUY rating on the stock.

ACC missed our estimate primarily due to higher-than-estimated increase in variable costs (up 24% YoY/20% QoQ) in 4QCY21. EBITDA was at INR5.6b v/s estimated INR6.7b, while EBITDA/t stood at INR741 v/s estimated INR966. Adj. Profit declined 26% YoY to INR3.2b v/s estimated INR4.1b....

PAT of | 280.9 crore was lower than our estimates, mainly due to exceptional charge of | 54.8 crore pertaining to restructuring What should investors do? ACC's share price has grown by ~1.9x over the past...

ACC has delivered 11% EBITDA/te CAGR over CY16-CY21E vs 7% for our coverage universe led by increased cost efficiencies. ACC’s EBITDA/te inched up to Rs1,127/te during 9MCY21E resulting in narrowing of the gap vs peers.

We recommend a BUY rating on the stock with a target price of Rs 2,480/share

Cement volumes in line with our expectation: Volumes grew 1.2% YoY to 6.6mnt (PLe:6.6mnt). Capacity utilisation in Q3CY21 improved by 200bps QoQ to 79%. Ready Mix concrete (RMC) volumes grew 48% YoY (+17% QoQ) at...

ACC's Q3CY21 EBITDA came in-line with our and consensus estimate. Volume in the quarter has increased by 1% YoY and is lower than UTCEM due to ACC's exposure in east and south. East region volume was impacted due to excessive rainfall. ACC planned capacity addition in central region, will provide much needed growth. ACC capacity to increase by 11% yoy in CY22E. On demand ACC expects industrial and commercial construction to witness revival on back of: a) Deferred investments from previous fiscal. b) Implementation of PLI (Production Linked Incentive) scheme. And c) Warehousing space to more than double over next 5 years due to e-commerce boom....

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.