Accumulate ACC; target of Rs 2205: KR Choksey

KR Choksey recommended accumulate rating on ACC with a target price of Rs 2205 in its research report dated January 30 2025.

Broker Research

January 31, 2025 / 14:00 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

KR Choksey's research report on ACC

ACC Q3FY25 revenue and earnings beat our estimates supported by one-offs, however, Adj. EBITDA and PAT came in below our expectations. Revenue increased by 20.6% YoY (+28.5% QoQ) to INR 59,274 Mn, driven by higher volume growth of 20.5% YoY, beating our estimates. Adjusted revenue stood at INR 52,905 Mn, up 7.7% YoY (+14.7% QoQ), excluding a one-time refund of INR 6,368.6 Mn related to excise duty expenses. Adjusted EBITDA stood at INR 4,789 Mn (-47.1% YoY/ +9.7% QoQ); Adj. EBITDA margin stood at 9.1% (-936bps YoY/-41bps QoQ), missing our estimates. We reduce our FY26E/FY27E EBITDA by 15.2%/14.9% to INR 33,200 / 38,741 Mn, reflecting in weaker than expected Q3FY25 performance (excl. the one-offs) and continued pressure on margins from subdued realizations. We anticipate margin recovery to be gradual as volume contribution from the Southern region is likely to put pressure on margins due to continued soft pricing trend in the South region and slower-than-expected realization of cost synergies.

Outlook

We roll over our valuation to FY27E and assign an EV/EBITDA multiple of 10.5x and accordingly arrive at a target price of INR 2,205 (previously: INR 2,790) and downgrade our rating on ACC Ltd to “ACCUMULATE” from “BUY”.

For all recommendations report, click here