Neutral ACC; target of Rs 1990: Motilal Oswal

Motilal Oswal recommended Neutral rating on ACC with a target price of Rs 1990 in its research report dated April 28, 2023.

Broker Research

April 28, 2023 / 22:37 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on ACC

ACC’s Jan-Mar ‘qtr (5QFY23) results were in-line with our estimates on operating parameters. EBITDA stood at INR4.7b v/s estimated INR4.8b and EBITDA/t stood at INR549 v/s estimated INR603. Higher other income led to 13% beat in adjusted profit to INR2.9b. Ametha integrated plant with clinker/grinding capacity of 3.3mtpa/1mtpa will be commissioned by 2QFY24. Kiln fuel cost declined 10% QoQ, leading to a 3% QoQ decline in variable cost. Further, cost-reduction initiatives such as reduction in logistics cost, and clinker factor, are underway. Cash balance stands at INR31.4b v/s INR2.9b in Dec’22. We keep FY24/25 estimates largely intact and reiterate our Neutral rating on the stock with a TP of INR1,990 based on 10.5x FY25E EV/EBITDA. Though valuation at 12x/9.3x FY24/25E EV/EBITDA and US$96 FY24E EV/t appears attractive, we would wait for clarity on the company’s growth plans before becoming constructive on the stock.

Outlook

We value ACC at 10.5x FY25E EV/EBITDA to arrive at a TP of INR1,990 and reiterate our Neutral rating on the stock.

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