Arihant Capital has given Hold recommendation for ACC with a target price of Rs. 2479 in its research report issued on Oct 20, 2021
Arihant Capital’s research report on ACC
ACC Limited reported good set of numbers for Q3CY21 on YoY basis Revenue from operations grew by 6% YoY however on QoQ basis revenue from operations declined by 3.5% to INR 3749 cr although it was above our estimate of INR 3600 cr. The YoY growth in topine was backed by volume and realization growth. Sales Volume grew by 1.5% YoY however declined by 29% Q0Q to 6.6 million tonne against our estimate of 6.7 million tonne. Realization/ton grew by 7.1% YoY and declined by 0.6% QoQ to INR 5680 against our estimate of INR 5373.Price hike taken in cement prices helped in improved realization.
At CMP of INR 2245 the stock is trading at a EV/EBIDTA multiple of 10.6(x) and 9.4(x) to its CY21E & CY22E ,we value the stock at EV/EBIDTA multiple 10.6(x) to its CY22E EBIDTA of INR 3608 cr to arrive at a target price of INR 2,479 and assign Hold rating on the stock.