ACC - Lower realizations lead to earnings miss - Emkay

Q3CY12 EBITDA Rs4.35bn,+97% yoy, lower than est (Rs4.8) due to lower realizations Rs4527/t (+19.7% yoy,-1.4% qoq) vs est of Rs4648/t. EBITDA/t at Rs806, +108% yoy, -25% qoq. APAT at Rs2.48 bn also miss estimate of Rs2.88 bn.

- Volumes decline as ACC lost market share. P&F costs jumps +5% qoq as volume decline impacted energy efficiencies. However 5% qoq decline in freight costs surprise positively.

- Oct price hikes of Rs8-12/bag in Northern & Central regions bring positive surprise. AP also see sharp price hike driving CY13EPS upgrade of 3.5%. Introduce CY14E EPS at Rs106.8.

- Revise TP to Rs1510 driven by earnings upgrade. Stock valuation at 8.6X EV/E, USD 140 EV/T remains reasonable compared to peers (Ambuja EV/E 9.5X & EV/T USD 183, Ultratech- EV/E 10.5 X, EV/T -USD170). ACCUMULATE.

Source : Equity Bulls

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