Sell ACC; target of Rs 1552: Karvy Stock Broking

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26 Aug, 2025 12:21

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Karvy Stock Broking's research report on ACC

ACC’s Q1CY17 operational performance better than our & consensus estimates, led by higher than expected volumes and lower than expected fixed costs. EBITDA of Rs 3.42 bn (-9% YoY) was 18% higher than our estimate of Rs 2.88 bn. Volume growth of 4% YoY was better than expectations. EBITDA/t stood at Rs 518/t (-13% YoY), came higher than our estimate of Rs 447/t led by lower fixed costs.

Outlook

Going ahead, we increase CY17E/18E estimates to factor in better Q1CY17 performance. CY17-18E is expected to see increase in profitability (on a low base of CY16) with EBITDA CAGR of 24% led by pick-up in volumes & margin improvement. However, valuation at 13.9x EV/EBITDA CY18E looks expensive and factors in most of the positives. Maintain Sell.

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