ACC - 2QCY2012 Result Update - Angel Broking

ACC's 2QCY2012 net profit rose by a strong 24.1% yoy to Rs.418cr on account of a 13.3% yoy growth in its realizations. Realization rose by 7.9% even on a qoq basis. However, volume grew by a disappointing 2%, much below the industry growth rate of ~8-9% during the quarter.

OPM up 64bp yoy at 24.8%: ACC's standalone top-line rose by 15.6% yoy to Rs.2,778cr, aided by a strong 13.3% yoy growth in realization to Rs.4,591/tonne. The realization was higher by 7.9% even on a q-o-q basis as a healthy demand situation across the country resulted in an upward movement in the prices. The strong improvement in realization was to a large extent offset by an increase in operating costs resulting in a marginal 60bp yoy improvement in the OPM to 24.8%. The company's per tonne operating cost was higher by 12.5% on a y-o-y basis, with freight and power & fuel costs higher by 19.2% and 4.1% yoy respectively. The bottom-line rose by 24% yoy to Rs.418cr.

Outlook and valuation: We expect ACC to register a 15.9% yoy growth in its topline over CY2011-13E, aided by a higher volume and realization. The bottomline is expected to post a CAGR of 7.3%. At current levels, the stock is trading at an EV/tonne of US$119 on CY2013E capacity, which we believe is fair. Hence, we continue to remain Neutral on the stock.

Source : Equity Bulls

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