Arihant Capital recommended accumulate rating on ACC with a target price of Rs 1637 in its research report dated October 23, 2018.
Arihant Capital 's research report on ACC
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).
Outlook
We have valued the stock at 10(x) its EV/EBITDA of CY19 estimate and have arrived at a fair value of Rs 1,637 per share. This is an upside of 15%. At CMP of Rs 1422 the stock is available at CY19E P/E(x) of 20(x) and CY17 EV/EBITDA(x) of 13.2(x) respectively. We have an “ACCUMULATE” rating on the stock.
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