ACC Q2 Results Review - Volume Growth Remains Exceptional; Maintain 'Buy': Systematix

Systematix Research Report

ACC Ltd.’s leading market share in green blended cement, a growing range of premium products, improved rail-to-road optimisation, and sustainability initiatives has helped the company to enhance its market presence.

With a robust volume growth trajectory, ACC is one of the only large players yet to register a sequential rise in revenues. While the bulk of the already announced capex is in Ambuja Cement Ltd., we anticipate a strong pipeline for capacity addition in ACC to outpace industry growth (7-8%) by 400-450 basis points over FY24-FY28E as Adani Cement races to reach 140 million tonnes per annum.

The stock is trading at one-year forward enterprise value/Ebitda of 11.5/9.6 times on FY25E/FY26E.

We revise our target price to Rs 2,668 (preiously Rs 3,100) and value ACC based on 12 times (previously 14 times) FY26E EV/Ebitda and maintain Buy on the stock.

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