Prabhudas Lilladher's research report on ACC
ACC reported weak operating performance in Q1FY26 despite strong volume growth and higher realizations. Volumes grew 12.7% YoY on higher trade volume aided by MSA and strong growth in premium products. Average cement NSR grew 4% QoQ led by price recovery in Southern and Eastern markets since Mar’25. EBITDA/t grew just 2% YoY affected by higher RM costs (purchase of finished goods up 79% YoY). Improved fuel mix, lower fuel prices, greater adoption of green energy (26%), and increased volumes led to a 24% YoY reduction in power and fuel costs; while shorter lead distances and a rise in direct dispatches led to a 6.5%YoY drop in freight expenses.
Outlook
We expect ACC to deliver Revenue/EBITDA/PAT CAGR of 10%/24%/12% over FY25-28E. The stock is currently trading at 9.6x/8.2x EV of FY26/27E EBITDA. Maintain ‘BUY’ with revised TP of Rs2,543 (Rs2,602 earlier) valuing at an EV multiple of 12x Mar’27E EBITDA.
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