Neutral ACC; target of Rs 2215: Motilal Oswal

Motilal Oswal's research report on ACC

ACC reported EBITDA of INR3.8b, beating our estimate of INR3.5b, driven by higher volumes and lower opex. EBITDA/t stood at INR490 v/s estimated INR465. Adj. Profit was at INR1.7b v/s estimated 1.6b. Lower costs helped steep margin recovery from a historical low last quarter. Higher working capital requirements (up INR27.6b YoY), led by steep increase in other current assets contributed to a decline in cash balance. Commissioning of the Ametha plant (2.7mtpa clinker and 1mtpa grinding unit) has been delayed by six months. We reduce FY24E/25E EBITDA by 4-5% and EPS by 6-7% on assumptions of lower volumes.

Outlook

We reiterate our Neutral rating with a TP of INR2,215 (from INR2,360 earlier), based on 12.5x Sep’24E EV/EBITDA.