Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

ACC - Strong execution - third time in a row - ICICI Securities

Posted On: 2020-10-19 22:14:46

ACC continue to surprise positively for third consecutive quarter with Q3CY20 EBITDA increasing 21% YoY to Rs6.7bn - higher than our / consensus estimates. Volumes grew 1.4% YoY vs our estimate of 2% YoY decline; while realisation grew 2.8% YoY (I-Sec: 2% YoY). Cement EBITDA/te increased 25% YoY to Rs1,015/te; while blended EBITDA/te grew 19% YoY to Rs991/te. ACC's cost efficiency programme 'Parvat' which seems to be targeting cost savings of Rs150-200/te and increased traction in MSA with ACEM would drive sustainable improvement in ACC's profitability, in our view. Factoring-in better margin, we increase our CY20E-CY21E EBITDA 6-7% and raise our target price to Rs1,830/share (earlier: Rs1,625) based on 9x Sep'22E EV/E on half-yearly roll-over. Maintain BUY.

- Revenues stood flat YoY at Rs34.7bn (I-Sec: Rs33.3bn): Grey cement realisation increased 2.8% YoY (declined 3.4% QoQ) to Rs4,877/te mainly led by strong low double-digit increase in South. Cement prices have further increased by Rs10-20/bag across most regions w.e.f. Oct'20 mainly to mitigate recent cost increases and average pan-India prices are now up ~6% YoY. Volumes including clinker sales increased 1.4% YoY (broadly in-line with industry average) to 6.77mnte owing to improved demand in retail and rural segments, with gradual pick-up in demand from commercial and industrial segments too. Management expects increased government thrust on affordable housing and infrastructure, and coupled with improved rural housing demand, would drive cement demand in the near term.

- RMC revenues declined 41% YoY to Rs2bn led by 51% YoY decline in volumes on continued lockdown in urban centres. RMC EBITDA loss stood at Rs160mn vs positive EBITDA of Rs154mn in Q3CY19. Other operating income increased 9% YoY / declined 15% QoQ to Rs698mn.

- Cement cost/te declined 1.5% YoY / 2.9% QoQ to Rs3,965/te. Purchase of third-party products increased sharply from Rs0.9bn to Rs2.3bn mainly led by MSA with ACEM. Excluding these, raw material plus power and fuel plus freight cost/te declined 6% YoY (flat QoQ) on optimisation of source mix, better supply-chain management, higher usage of AFR in the fuel mix and improved operational efficiencies. Share of blended cement has also increased 300bps YoY to 91% in Q3CY20. Freight cost/te declined 10% YoY (rose 3.4% QoQ) owing to higher direct deliveries, warehouse space optimisation, and network efficiencies. Other expenses/te including employee costs declined 19% YoY (4% QoQ) on stricter control in discretionary fixed costs, negotiation-led savings, and rationalisation of various cost items. PAT increased 20% YoY to Rs3.6bn.

- Other key highlights: a) ACC has appointed Mr. M R Kumar, Chairman of LIC as an Additional Director on the board of the company. LIC holds 4.95% stake in ACC as of Sep'20 and b) technology know-how fees paid @1% of sales to the LafargeHolcim would be due for renewal by Jan'21 after a gap of three years.

Shares of ACC LTD. was last trading in BSE at Rs.1562.8 as compared to the previous close of Rs. 1561.4. The total number of shares traded during the day was 53073 in over 3247 trades.

The stock hit an intraday high of Rs. 1574 and intraday low of 1539. The net turnover during the day was Rs. 82560138.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Upgrade in target price of IDFC First Bank - Angel Broking

Laurus Labs stake acquisition in Richore Lifesciences - Angel Broking

Shares of Lakshmi Vilas Bank (LVB) suspended from trading - Angel Broking

Initiating Coverage on Sundram Fasteners - Fastening growth - HDFC Securities

Astral Poly Technik - Scalability to further improve with storage tanks foray - ICICI Securities

Vardhman Special Steel - Q2FY21 Company Update - ICICI Direct

Initiating Coverage - Advanced Enzyme Technologies - ICICI Direct

L&T - Secures Large Contract - Nov 25, 2020 - Angel Broking

Alembic Pharmaceuticals - Tentative Approval for JV - Angel Broking

Drug launch by Lupin - Tacrolimus Capsules - Angel Broking

Gujarat Gas - Nov 25, 2020 - Angel Broking

Metropolis Healthcare - Nov 25, 2020 - Angel Broking

NTPC - Showcase of strength & competitiveness - ICICI Securities

Telecom - Market Share TRACKER - Bharti is narrowing the gap on incremental market share vs RJio - ICICI Securities

Cochin Shipyard - Q2FY21 Result Update - ICICI Direct

Engineers India - Q2FY21 Result Update - ICICI Direct

Rupee - Nov 24, 2020 - Reliance Securities

FMCG Sector Update - Recovery unlocked; lower growth divergence - HDFC Securities

Engineers India - Consultancy segment outperformance - ICICI Securities

Engineers India - Q2 FY21 Result Update - YES SECURITIES

Motherson Sumi Systems - Company Update - Virtual Investor Conference - ICICI Direct

Mutual Fund Review - November, 2020 - ICICI Direct

Sadbhav Engineering - Q2FY21 Company Update - ICICI Direct

IRB Infrastructure - Q2FY21 Company Update - ICICI Direct

Vodafone Idea fund raising - Angel Broking

Rupee - Nov 23, 2020 - Reliance Securities

Crude Oil - Nov 23, 2020 - Reliance Securities

Q2FY21 Bank Result Quick Review - Angel Broking

Banks & NBFC's Sector Update Report - Yet another watershed moment? - HDFC Securities

Galaxy Surfactants - EBITDA/kg has an upside risk - ICICI Securities

Diagnostics - COVID-19 tests continue to trend higher - ICICI Securities

Banking & Financial Services - Sector Update - Nov 22, 2020 - ICICI Direct

Dalmia Bharat Sugar - Q2FY21 Company Update - ICICI Direct

Balkrishna Industries - Industry export growth momentum continues - ICICI Securities

Covid Recovery Pulse - Festive positivity continues in auto retails, E-way bill generation improves... - ICICI Direct

Quant Pick - Exide Industries - ICICI Direct

Shankara Building Products - Q2FY21 Company Update - ICICI Direct

Triveni Engineering - Q2FY21 Company Update - ICICI Direct

Initiating Coverage on Sudarshan Chemical - Leaping into the league of giants - HDFC Securities

Earnings Wrap Q2FY21: Earnings outperform, post Covid recovery picks up steam - ICICI Direct

Vodafone Idea Positive development beneficial for IDFC first bank - Angel Broking

Lakshmi Vilas Bank - Angel Broking

WIPRO Buyback record date announcement - Angel Broking

TCS buyback record date announcement - Angel Broking

Banks Sector Update - Collection efficiency - a positive surprise! - HDFC Securities

Quant Pick - Max Financial Services - ICICI Direct

Graphite India - Q2FY21 Result Update - ICICI Direct

Gladiator Stocks - Maruti Suzuki India - ICICI Direct

Exide Industries - Q2FY21 Result Update - ICICI Direct

Mishra Dhatu Nigam - Execution outlook remains strong - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019