ACC Ltd., incorporated in the year 1936, is a Large Cap company (having a market cap of Rs 34454.27 Crore) operating in Cement sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 4335.94 Crore, up 3.02 % from last quarter Total Income of Rs 4208.75 Crore and up 21.88 % from last year same quarter Total Income of Rs 3557.63 Crore. Company reported net profit after tax of Rs 558.13 Crore in latest quarter.
Investment Rationale
ACC’s current capacity utilization is ~ 90% and effective contribution of new capacity will be marginal in CY22. Focus on cost savings and improving operating efficiencies with Ambuja Cement’s (ACEM) assistance will drive ACC’s performance in the next 2 years. This includes benefits of market supply agreement with ACEM that will keep cost spikes in control and commissioning of waste heat recovery units. It has valued ACC at 9x EV/EBITDA on the revised CY22e EBITDA of Rs32.9bn and arrive at a target prices of Rs1,983/sh. The multiple assigned is to narrow valuation gap (based on improving performance) between the top performing companies (SRCM) and ACC. Improving macro-economic conditions further aide support.
Promoter/FII Holdings
Promoters held 54.5 per cent stake in the company as of Dec 30, 2020, while FIIs held 11.7 per cent, DIIs 20.7 per cent and public and other 13.1 per cent.
