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Elara Capital
ACC (Accumulate)
CMP: ₹1,574.25
Target: ₹1,836
ACC reported a standalone EBITDA of ₹430 crore, better than our and the Street’s expectations of ₹299 crore and ₹380 crore, respectively. Net sales was up 15 per cent y-o-y to ₹3,500 crore. EBITDA margin expanded by 90 bps y-o-y to 11.9 per cent. Adjusted PAT stood at ₹245 crore, posting growth of 16 per cent y-o-y on the back of higher volume margin.
Sales volume was up by 8 per cent y-o-y to 71 lakh tonnes, due to improvement in volume across all regions. Even on a sequential basis, volume was up by 3 per cent.
At a CMP of ₹1,574, ACC is trading at an EV/tonne of around $117 of CY18E capacity. Taking into account lower valuations than peers, we reiterate our ‘Accumulate’ rating on the stock with a new target price ₹1,836 from ₹1,878 based on EV per tonne of $140 on December 2018E capacity.
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