MOSL: ACC 3QCY19 RESULTS (Neutral)-In-line-Revival driven by capex-led growth
ACC 3QCY19 RESULTS: In-line; Revival driven by capex-led growth
(ACC IN, Mkt Cap USD3.9b, CMP INR1499, TP INR1900, 27% Upside, Buy)
- Weak demand impacts volume but pricing strong: Volumes declined 1.5% YoY to 6.44mt in 3QCY19. However, premium product volumes increased 8% YoY. Cement realizations were up 4% YoY to INR4,958, but down 6% sequentially due to a fall in prices post May'19. Revenue grew 3% YoY to INR35b (our estimate: INR36b), led by optimization of market/product mix.
- Better profitability led by healthy realizations: Blended cost/t rose 1% YoY (-1% QoQ) to INR4,614. However, blended EBITDA/t was up 28% YoY (-20% QoQ) to INR864 due to healthy realizations. Thus, EBITDA increased 26% YoY (-29% QoQ) to INR5.56b (in-line). Operating margin came in at 15.8% (+2.8pp YoY, -3.07pp QoQ). Adj. PAT was up 46% YoY to INR3b (in-line).
- presentation key takeaways: (1) Ready mix concrete volumes were up 11% YoY. (2) Increase in power & fuel cost was partly mitigated by fuel source mix optimization. ACC enhanced the use of alternative fuels. (3) Freight cost/t was up due to higher handling and warehouse cost.
Acc is a cement and concrete manufacturing group based in India. Co. is predominantly engaged in the production and selling ordinary portland cements, composite cements and special cements and ready mix concrete. In addition, Co. is engaged in the provision of consultancy services for the overseas markets and real estate development. Through its subsidiaries, Co. is also engaged in manufacturing and selling of rubber tire, cement machinery, part of machinery and cast articles of alloy steel; trading in cement transportation; and distributing bulk cement. Co.'s operations are organized along two primary business segments: Cement and Ready Mix Concrete.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.