ACC Limited - An in line quarter - Emkay

Reco: REDUCE
CMP: Rs 1195
Target Price: Rs 1100

- Amidst tepid expectation, ACC delivered an in line 2Q performance - EBITDA of Rs4.34 (Est Rs4.32bn) -33% yoy, EBIDTA/t Rs710 down 34% yoy. APAT at Rs2.6 bn (-37% yoy) came in lower than estimate led by other income miss

- Strategic deal between Ambuja & Holcim largely NEUTRAL for ACC minority shareholders in near term

- Pricing power remains weak even as costs remain elevated. ACC high cost structure amidst weak pricing power to strain profitability. Cut CY13E/14E EPS by 8%/7% & TP to Rs1100

- Tepid CY12-14E EPS CAGR of 6% despite building strong CY14E recovery. Valuation at 16x PER & 9.2x EV/E does not leave any upside. REDUCE

Source : Equity Bulls

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