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Research
ACC - 1QCY22 Result - First Cut - Reliance Securities
Posted On : 2022-04-19 21:16:24( TIMEZONE : IST )
ACC reported a weak EBITDA performance on a YoY basis marred by an increase in input costs.
Sales volume grew 2.9% QoQ (down 3.3% YoY) to 7.7mn tonnes and 1.8% lower than our estimate of 7.9mn tonnes.
EBITDA stood at Rs5.29bn (-32% YoY, but up 13.4% QoQ), marginally ahead than our estimate of Rs5.23bn, while EBITDA/tonne stood at Rs655 vs. Rs952 and Rs597 in 1QCY21 and 4QCY21 and against our estimate of Rs637.
Avg. realization increased 8.7% YoY and 0.7% QoQ at Rs5,321/tonne, marginally lower than our estimate of Rs5,388.
Further, total cost/tonne increased by 24.7% YoY at Rs4,919 (+0.4% QoQ), around Rs168/tonne higher than our estimate. Power & Fuel cost/tonne saw a surge of 34% YoY and 7.4% QoQ to Rs 1,348 due to higher coal and pet coke prices.
Consequently Adjusted net profit fell 30% YoY (up 17% QoQ) to Rs3.92bn, against our estimate of Rs3.6bn, due to higher operating revenue and other income.
Our View: While realizations during the quarter were better both on a QoQ and YoY basis, input cost pressure took a toll on EBITDA margins which contracted by 629bps YoY (up 96bps QoQ) to 12.2% and 29bps higher than our estimate. Higher input cost continues to remain the major concern for all cement companies and is expected to remain so in CY22/FY23 unless fuel and diesel prices cool off meaningfully. While ACC has been working on improving cost efficiencies through various ways, these are expected to start paying off. The commissioning of new capacities and a further improvement in operating parameters by way of setting up WHRS at various plants should aid it to witness sustainable growth. Currently, we have a BUY recommendation on the stock with a 1-Yr Target Price of Rs2,636.
Shares of ACC Limited was last trading in BSE at Rs. 2057.90 as compared to the previous close of Rs. 2153.55. The total number of shares traded during the day was 25995 in over 2806 trades.
The stock hit an intraday high of Rs. 2184.95 and intraday low of 2028.25. The net turnover during the day was Rs. 54817586.00.
