ACC Q1 Results Review - Expect Revival Post Monsoon: Systematix

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Systematix Research Report

ACC Ltd.’s top line for the quarter was in line with expectations while Ebitda/profit after tax missed estimates on account of higher-than-expected operating costs and a sharper drop in realization. Standalone revenue was down 1% YoY (-4.5% QoQ) to Rs 51.6 billion in line with our estimate of Rs 50.8, as weak realisations offset the volume growth.

Volume was up by a healthy 8.5% YoY (-1.9% QoQ) to 10.4 milliob tonnes per annum against our estimate of 10.1 mtpa. Blended realisation stood at Rs 5,054; a decline of 8.7% YoY and 2.6% QoQ. Ebitda for the quarter fell 11.9% to Rs 6.8 billion against our estimate of Rs 8.4 billion owing to higher-than-expected raw material and P&F cost. Ebitda/tonne stood at Rs 664 (-18.8% YoY, -17.5% QoQ).

ACC's power and fuel costs stood at Rs 970/tonne (- 25.1%/+3.7% YoY/QoQ) which was driven by optimisation of fuel mix and higher consumption of alternative fuels, while freight costs also declined 13.6% YoY Rs 1,075.

Waste heat recovery system as a share of total power consumption stood at 10% in Q1 FY25 versus 8.2% in the last quarter. Kiln fuel cost improved from Rs 2.14 per KCal to Rs 1.73 per KCal due to the change of fuel basket and higher consumption of alternative fuels. However, raw material cost surged 13.8% sequentially (+2.5% YoY) to Rs 1,730. Adjusted PAT was down 21% YoY to Rs 3.7 billion (-51.1% QoQ).

Our estimates remain largely unchanged, and we factor a 9.0% / 10.6% / 13.6% volume/revenue/Ebitda CAGR over FY24-FY26E. We keep our target price unchanged at Rs 3,100 based on 14 times FY26E EV/Ebitda. We maintain Buy on the stock.

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Systematix ACC Q1 FY25 Results Review.pdf

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Also Read: ACC Q1 Results: Revenue At Rs 5,155 Crore, Beats Estimates

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