Motilal Oswal neutral on ACC

Motilal Oswal has maintained neutral rating on ACC with a target of Rs 1447, in its July 27, 2012 research report.

“ACC's standalone performance in 2QCY12 was better than expected. EBITDA was INR6.6b v/s our estimate of INR5.5b and adjusted PAT was INR4.2b v/s our estimate of INR3.5b, aided by strong realizations and in-line cost.”
“Volumes grew 2% YoY (declined 10% QoQ) to 6.05mt v/s our estimate of 6.1mt. Realization improved 13% YoY (8% QoQ) to INR4,591/ton v/s our estimate of INR4,396/ton, driven by strong pricing across markets. Net sales grew 16% YoY (declined 3% QoQ) to INR27.8b v/s our estimate of INR26.8b. Cost push was largely in line with our estimate, with QoQ cost inflation in freight and other expenses. Despite cost push, higher realization led to improvement in profitability. EBITDA/ton was INR1,076 v/s INR898 in 1QCY12 and our estimate of INR905. EBITDA grew 18% YoY (8% QoQ) to INR6.5b. EBITDA margin expanded 50bp YoY (230bp QoQ) to 23.4% v/s our estimate of 20.6%. The RMC business continues to make loss, with PBIT loss of INR33m v/s INR88m in 2QCY11 and INR33.5m in 1QCY12. The company has announced an interim dividend of INR11/share v/s INR28/share in CY11.”
“We are upgrading our EPS estimates by 11.3% to INR74.4 for CY12 and by 5.9% to INR87.8 for CY13 to factor in higher realizations and moderately lower volumes. The stock trades at 14.4x CY13E EPS, and at an EV of 7.6x CY13E EBITDA and USD114/ton. Maintain Neutral with a target price of INR1,447 (EV of ~9x CY13E EBITDA),” says Motilal Oswal research report.  Public holding more than 90% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment

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