Maintain Buy on ACC - Motilal Oswal

ACC 4QCY10: Below est, impacted by lower than estimated realizations & higher fixed cost; Cutting estimates 7-8%

Volumes grew 4.7% YoY (~16% QoQ) to 5.61mt (in-line). Realizations improved 2.9% QoQ (~2.7% YoY decline) to Rs3,490 (v/s est Rs3,550/ton).

EBITDA grew 23% QoQ (~56% YoY de-growth) to Rs2.09b and margins improved by 20bp QoQ to 10.7%, impacted by higher staff cost and other expenses.

Declared final dividend of Rs20.5/share including Rs7.5/share as special Platinum Jubilee dividend (total of Rs30.5/share for CY10).

After three years of muted volume growth, ACC would witness robust volume growth of ~10% CAGR over next two years driven by new capacities.

We downgrade CY11 EPS by 8.4% and CY12 by 6.9% to factor in robust pricing environment which is negated by higher cost push. Maintain Buy with target price of Rs1,066 (~10x CY11E EV/EBITDA).

Source : Equity Bulls

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