Buy ACC; target of Rs 1966: Dolat Capital Market

Dolat Capital Market is bullish on ACC has recommended buy rating on the stock with a target price of Rs 1966 in its research report dated October 19, 2020.

Broker Research

October 20, 2020 / 16:58 IST

26 Aug, 2025 12:21

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Dolat Capital Market's research report on ACC

ACC posted 0.3%/ 20.6%/ 21.0% YoY growth in revenue/ EBITDA/ PAT to Rs35.4 bn/ Rs6.7 bn/ Rs3.6 bn in Q3CY20 led by 0.8% YoY volume growth coupled with 3.8% YoY realization growth (-2.7% QoQ).  We expect 5.1%/ 10.5%/ 12.8% revenue/ EBITDA/ APAT CAGR over CY19-22E led by -11.6%/ 12.6%/ 12.2% volume growth and 3.2%/ 1.5%/ 1.0% cement realization growth in CY20E/ CY21E/ CY22E.  We increase our revenue/ EBITDA/ PAT estimates by 3.8%/ 8.6%/ 7.4% for CY20E. We broadly maintain CY21E estimates and introduce CY22E. Considering ACC’s healthy cash flow & RoE, net cash position, and 5.9mtpa (17.7% increase) capacity expansion, current valuation of 10.3x/ 8.7x/ 7.3x CY20E/ CY21E/ CY22E EV/EBITDA provides comfort which is 23%/ 35%/ 38% discount to 1yr Fwd EV/EBITDA of 3/ 5/ 10 years.

Outlook

We rollover to Sept’22E vs. Dec’21E. Thus, we maintain BUY with an upward revised TP of Rs1,966 (10x Sept’22E EV/EBITDA).

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