ACC Ltd reported weak numbers with EBITDA margin declining to 9.5% (14% YSEC est.) in Q2CY22. While, in-line volumes & 3% y/y NSR growth resulted in Rs44.7bn revenues (+15% y/y). In Feb-22, ACC commissioned Tikaria 1.6MTPA GU and others on commissioning would take total capacity to ~39MTPA by H1CY23E. Recent addition & upcoming capacity in central market will accelerate the volume growth to +8% CAGR over CY22-23E. For H1CY22, operating cost/te increased by +17% y/y due to unprecedented power cost/te surge by +39% y/y to Rs1,483, declined EBITDA/te to Rs669 (41% y/y). Therefore, the EBITDA/te for CY22E likely decline further to Rs678 (earlier est. Rs845) as imported coal prices sustaining +US$350/te & pet-coke to US$240/te. ACC scaling up its green-power share and alternative fuel usage to improve operating efficiency. Currently stock trades at 15/9x of EV/EBITDA on CY22/23E. Therefore, recommend ADD with TP of Rs2,385 (earlier Rs2400) at 10x EV/EBITDA on CY23E.
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Shares of ACC Limited was last trading in BSE at Rs. 2156.40 as compared to the previous close of Rs. 2172.60. The total number of shares traded during the day was 5651 in over 919 trades.
The stock hit an intraday high of Rs. 2191.20 and intraday low of 2149.50. The net turnover during the day was Rs. 12208129.00.