KR Choksey's research report on ACC
ACC reported revenue growth of 22.6% YoY/3.6% QoQ at INR 42,920 Mn. Cement sales volume saw a growth of 21.6% YoY to 8 MT from 6.6 MT in Q1CY20, mainly driven by robust demand and low base effect. EBITDA for the quarter was up by 46.7% YoY (+50.4% QoQ) to INR 8,602 Mn. EBITDA margin stood at 20%, an improvement of 329 bps YoY (+625 bps QoQ). Expansion in EBITDA margin was led by operational efficiency and cost reduction initiatives. Net Profit saw a quantum jump of 74.2% YoY (+19.1% QoQ), while Net Profit margin for the quarter expanded by 388 bps YoY to 13.1% (+171 bps QoQ).
Outlook
As a result, we raise our target price for ACC from INR 2,100 earlier to INR 2,185, valuing the company at 10.5x FY22E EV/EBITDA, giving an upside potential of 19.7% over CMP. Accordingly, we reiterate our “BUY” rating on the shares of ACC Ltd.
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