ACC posted a strong set of numbers with 7.8%/ 25.3%/ 38.6% YoY growth in revenue/ EBITDA/ APAT to `41.5 bn/ `7.8 bn/ `4.5 bn in Q2CY19 driven by strong 8.4% YoY/ 10.3% QoQ realization growth. We expect 6.8/ 25.1%/ 21% revenue/ EBITDA/ APAT CAGR over CY18-20E led by 1.1%/ 3.7% volume growth and 5.8%/ 2% cement realization growth in CY19E/ CY20E. Considering ACC’s healthy cash flow & RoE, net cash position, and 5.9mtpa (17.7% increase), current valuation of 10x/ 9.1x CY19E/20E EV/EBITDA is attractive.
OutlookWe recommend BUY with a TP of `1868 (11x CY20E EV/EBITDA). Given ACC’s high capacity utilization at 86%/ 86%/ 89% for Q2CY19/ CY19E CY20E (leaves little headroom for volume growth), sustainability of current cement realization is more important for profitability.
For all recommendations report, click hereDisclaimer: 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.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
Read More
