Accumulate ACC; target of Rs 2325: Geojit

Geojit's research report on ACC

ACC Ltd. is a leading Indian cement company with 17+ cement plants and 82 ready-mix concrete (RMC) plants. It manufactures a range of cement and blended cement. In Q1FY24, ACC’s revenue grew 16.4% YoY to Rs. 5,201cr, driven by the rise in sales volume. EBITDA surged by 80.9% YoY to Rs. 771cr, with EBITDA margin expanding by 530bps to 14.8%, driven by cost reductions. Additionally, PAT surged by 105% YoY to Rs. 466 cr. ACC posted strong performance during the quarter owing to improved operational efficiency and higher sales volume. Continued growth will be propelled by positive demand trend in the cement industry, robust sales volume, improved operational efficiency, continuous capacity expansion, and synergy advantages.

Outlook

Hence, we upgrade our rating to ACCUMULATE on the stock with a revised target price of Rs. 2,325 based on 11.5x FY25E adj. EPS.

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