Buy ACC; target of Rs 2900: Emkay Global Financial

Emkay Global Financial's research report on ACC

ACC’s Q4FY24 EBITDA grew 79% YoY (down 8% QoQ) to Rs8.4bn, which was ~4% higher than our estimate. On a sequential basis, EBITDA/t declined by Rs215 to Rs802 (Emkay: Rs820), mainly on account of weak blended realizations that fell by Rs341/t in Q4FY24. Total cost/t declined 14% YoY (3% QoQ) to Rs4,379 (Emkay: Rs4,505) owing to cost savings across line items. Volume growth surprised positively with 23% YoY growth to 10.4mt, mainly led by increased MSA transaction with Ambuja/Sanghi Cement. Factoring-in the Q4FY24 performance and higher costs, we tweak our EBITDA by 2-5%.

Outlook

Given the healthy balance sheet and attractive valuations, we maintain BUY on ACC and our Mar-25E TP of Rs2,900/share (after the quarterly roll-over), based on 13x EV/EBITDA.