Buy ACC; target of Rs 2540: KR Choksey

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26 Aug, 2025 12:21

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KR Choksey's research report on ACC

In Q1CY22, ACC reported revenue growth of 3.1% YoY/4.8% QoQ at INR 44,265 mn. The cement segment revenues grew by 3.7% QoQ/3.1% YoY respectively while the ready mix concrete segment revenues grew by 19.2% QoQ/ 9.9% YoY respectively during the quarter. EBITDA grew by 14.1% QoQ but declined by 26.2% YoY to INR 6,347 mn due to significant fuel cost increase. The margins grew by 117 bps QoQ but declined by 571 bps YoY to 14.3%. EBITDA was also below our estimates by 6.2%. PAT grew by 41.1% QoQ but declined by 29.6% YoY to 3,963 mn. The margins grew by 231 bps QoQ but declined by 415 bps YoY to 9.0%. PAT was above our estimates by 7.5%. The cement volumes stood at 7.71 million tonnes during the quarter as compared to 7.97 million tonnes in Q1CY21.

Outlook

Various cost initiatives taken under “Project Parvat” to bring down the costs are now visible. The company has a healthy balance sheet with robust outlook going ahead. As a result, we value the stock at 9.2x CY23E EV/EBITDA, which yields a target of INR 2,540 per share (unchanged), giving an upside potential of 15.0% from CMP. We maintain our rating to “BUY” on the stock.

More Info

At 12:42 hrs ACC was quoting at Rs 2,244.00, up Rs 36.60, or 1.66 percent.

It has touched an intraday high of Rs 2,249.85 and an intraday low of Rs 2,205.30.

It was trading with volumes of 21,914 shares, compared to its thirty day average of 20,849 shares, an increase of 5.11 percent.

In the previous trading session, the share closed up 7.26 percent or Rs 149.50 at Rs 2,207.40.

The share touched its 52-week high Rs 2,587.95 and 52-week low Rs 1,784.15 on 15 November, 2021 and 22 April, 2021, respectively.

Currently, it is trading 13.29 percent below its 52-week high and 25.77 percent above its 52-week low.

Market capitalisation stands at Rs 42,139.46 crore.

For all recommendations report, click here

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