ACC - March 2013 Results Preview - Motilal Oswal

- Dispatches in 1QCY13 are estimated to decline 2% YoY (+11% QoQ) to 6.59mt. Average realizations are expected to improve by 4.8% QoQ (up 2.6% YoY) to INR4,366/ton.

- EBITDA margin is expected to compress by 2.9pp YoY (+8.4pp QoQ due to consolidation of loss-making RMC business in 4QCY12) to 18.6%, impacted by lower realizations growth relative to cost push and negative operating leverage. EBITDA/ton is estimated to decline by ~INR53/ton YoY (+INR330/ton QoQ) to INR864/ton.

- PAT would decline 7.7% YoY (+49% QoQ) to INR3.6b.

- We downgrade EPS estimates by 12%/11% for CY13E/CY14E to INR65 and INR84 respectively to factor the reduction in volumes and realizations.

- The stock trades at 13.8x CY14E EPS, 6.7x EV/EBITDA and USD92/ton. Maintain Neutral with a target price of INR1,323 (9x CY14E EV/EBITDA).

Source : Equity Bulls

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