ACC - Rating: Hold; Target price: Rs1,070 - Centrum

We expect 19% YoY decline in net sales to Rs25.1bn led by a decline in realization and sales volume. The results are not strictly comparable on a YoY basis due to the amalgamation of RMC business during Q4CY12. On a like-to-like basis, revenue is expected to decline 8.9% YoY. Realization is expected to decline 0.9% YoY to Rs4,416/tonne. Sales volume of the company is expected to decline 8.2% YoY to 5.5mt due to weak demand in the quarter.

- EBITDA is expected to decline 16.3% YoY to Rs2.7bn primarily due to lower sales volume in the quarter.

- EBITDA margin is expected to be at 10.6% against 10.2% in Q4CY12 and 9% in Q3CY13. EBITDA/tonne is expected to be Rs475 against Rs521 in Q4CY12 and Rs394 in Q3CY13.

- Adjusted PAT is expected to decline 33.3% YoY to Rs1.6bn. Adjusted PAT margin is expected to be 6.4% against 7.7% in Q4CY12 and 4.8% in Q3CY13.

Earnings and target price revised downwards: We are reducing our sales volume estimates by 3.2% for CY13E on the back of sluggish demand trend. We have revised realization assumptions downwards by 0.7%/2.4%/2.4% for CY13E/CY14E/CY15E. Considering lower sales volume and realization estimates our EBITDA estimates are getting revised downwards by 9.1%/14.3%/13.1% for CY13E/CY14E/CY15E. We maintain Hold rating on the stock with a revised price target of Rs1,070 (earlier: Rs1,242), downside of 3.5% from the CMP.

Source : Equity Bulls

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