Prabhudas Lilladher's research report on ACC
ACC (ACC) reported strong operating performance in 4Q, led by strong volume growth and better cost management. EBITDA was above our estimates on better operating leverage and containment in other operating costs. P&F costs improved on better fuel mix, higher AFR and higher proportion of WHRS. Work on WHRS facility at Chanda (18 MW) & Wadi (21.5 MW) is on track and expected to get commissioned in 2QFY25. With Adani group’s superior execution capabilities and focus on profitability, we expect not only improved pace of capacity addition but also capex on efficiency improvement for ACC units. Cement capacity is expected to grow to 44.2mtpa (incl. ACCPL) by FY26E. We cut FY25E EBITDA by ~6% on lower pricing and expect ~15% EBITDA CAGR over FY24-26E.
Outlook
The stock is currently trading at 14.1x/11.2x EV of FY25E/FY26E EBITDA. Maintain ‘BUY’ with revised TP of Rs3,509 (earlier Rs3,516) valuing at 15x EV of Mar’26E EBITDA.
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