ACC - 3QCY2012 Result Update - Angel Broking

ACC's 3QCY2012 net profit rose by a strong 48.4% yoy to Rs.249cr, beating our estimate of a 37% yoy growth. The company's strong performance was on account of a 19.8% yoy growth in its realizations. However, volume degrowth of 5.1% yoy for the quarter is a disappointment. For 9MFY2012 the company's volume growth has been marginal at 2.2%.

OPM up 415bp yoy at 19.0%: ACC's standalone top-line rose by 13.7% yoy to Rs.2,445cr, aided by a strong 19.8% yoy growth in realization to Rs.4,431/tonne. However, dispatches were down 5.1% yoy as the company was affected by a muted demand scenario in south India. The strong improvement in realization resulted in a 415bp yoy expansion in OPM despite the increase in operating costs. The company's per tonne operating cost was higher by 9.7% on a yoy basis. Freight and power & fuel costs were higher by 8.8% and 8.1% yoy respectively.

Outlook and valuation: We expect ACC to register a 13.9% yoy growth in its top-line over CY2011-13E. The bottom-line is expected to post a CAGR of 8.5%. At the current levels, the stock is trading at an EV/tonne of US$130 on CY2013E capacity, which we believe is fair. Hence, we continue to remain our Neutral recommendation on the stock.

Source : Equity Bulls

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