October 25, 2016 / 16:19 IST
Axis Direct's research report on ACC Q3CY16 EBITDA at Rs 2.7 bn (down 36% YoY) was significantly below consensus and our estimates. Volumes were down 10% YoY to 5.1 mnt mainly due to heavy rain in east and central regions. EBITDA/ton decreased to Rs 540 vs. Rs 746 in Q2CY16 largely due to increase in cost and negative operating leverage. Rise in cost was mainly due to rise in pet coke price, rise in lead distance and increase in freight cost.
We cut CY16/CY17 EPS by 12%/2% to Rs 40 and Rs 59 respectively in light of the recent performance. We also downgrade ACC to HOLD with a revised target price of Rs 1,674 (Rs 1,812 earlier).
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