Accumulate ACC; target of Rs 2166: KR Choksey

KR Choksey's research report on ACC

In Q1 FY24, ACC reported consolidated revenue of INR 52,011 mn, a growth of 8.6% on a QoQ basis from INR 47,908 mn and 18.4% on a YoY basis from INR 43,933 mn. The sales volume has also increased to 9.4 MT, a surge of 10.6% on a Q-o-Q basis from 8.5 MT and 24.3% on a YoY basis from 7.6 MT. Cement realization has recorded a de-growth of 6.4% on a YoY basis and decreased by 1.8% on a QoQ basis at INR 5533/ton. The EBITDA in Q1FY24 has substantially improved to INR 7,709, a rise of 64.6% on a QoQ basis from INR 4,684 mn and an increase of 80.9% on a YoY basis from INR 4,262 mn. The EBITDA margin in Q1FY24 stood at 14.8% and EBITDA per ton is at INR 818 /ton. The PAT in Q1FY24 was reported at INR 4,661 mn, an increase of 97.9% on a QoQ basis from INR 2,355 mn and a surge of 105.1% from INR 2,273. The PAT margin in Q1FY24 stood at 9.0% and EPS is at INR 24.76 per share.

Outlook

We now value the stock at 11x FY25E EV/EBITDA, which yields a target price of INR 2,166 per share, giving an upside potential of 13.2% from CMP. Accordingly, we have changed our rating to ‘ACCUMULATE’ on the shares of ACC.