ACC Q4 Results Review - Sustained Cost Efficiency Reinforces Conviction: ICICI Securities

ICICI Securities Report

Our earnings forecast for ACC Ltd. appears largely immune to the current weakness (and uncertain outlook) on cement prices. Sustained cost efficiency (across fixed/variable cost), expected benefit from imminent rise in share of green power (both waste heat recovery system and solar power) and scope for a further rise in volume benefits (under master-supply-agreement with parent Ambuja Cement Ltd., as well as sister concern Sanghi Industries Ltd.) is at the heart of this conviction.

Factoring these in, we broadly retain Ebitda for FY25E, but we raise our FY26E Ebitda by ~9%. A strong balance sheet (current cash/share of ~ Rs 250 seen surging to ~ Rs 490 in FY26E) and healthy return on equity of ~14–15% are compelling investment arguments.

We continue to ACC at 13 times FY26E enterprise /Ebitda. Retain 'Buy'; target price revised to Rs 3,272 (from Rs 2,931).

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