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Elara Capital
ACC (Buy)
CMP: ₹1,473.25
Target: ₹1,700
ACC Ltd is engaged in manufacturing of cement and ready mixed concrete. The company’s segments include cement and ready mix concrete.
ACC reported a standalone EBITDA of ₹590 crore, better than our’s and the Street’s expectations of ₹410 crore and ₹470 crore, respectively. Net sales were up 14 per cent y-o-y to ₹3,700 crore. EBITDA margin expanded by 90 bps y-o-y to 15.6 per cent. Adjusted PAT stood at ₹360 crore, posting growth of 12 per cent y-o-y on the back of higher volume and margin.
Due to ~16 per cent fall in share price in the last three months and taking into account lower valuations than peers we upgrade stock to ‘buy’ from ‘accumulate’ with a revised TP of ₹1,700 based on EV per tonne of $130 on December 2018E capacity.
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