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Emkay Global Financial\’s report on ACC

Q3CY21 EBITDA rose 6% YoY (down 18% QoQ) to Rs7bn, 5% above our estimate of Rs6.8bn (in line with consensus), as higher-than-expected cost/ton was offset by better grey cement realization and higher RMC and other operating income. Volumes were broadly flat YoY to 6.7mt. Grey cement realization declined 2% QoQ (vs. our estimate of a 3% decline), owing to a change in the regional mix. Other operating income increased by 37% YoY and 28% QoQ to Rs957mn (~Rs142/ton). Accordingly, blended EBITDA/ton was up 7% YoY/down 15% QoQ at Rs1,060 (Emkay est.- Rs1,010).


Factoring in higher opex/ton, we marginally cut our CY22-23 EBITDA estimates. However, we raise our TP by 2% to Rs2,620 as we roll over to Dec’22 from Sep’22. The revised TP is backed by a DCF analysis (11.25% WACC, 7.0% FCFF growth post FY26) and implies a 1-year forward EV/EBITDA of 11x (vs 10.4x earlier). Retain Buy.

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