Muted show in Q1CY22 along expected lines – CASINOIN -Sports betting at the casinoin betting company,casinoin online betting, casinoin bookmaker line, casinoin bookmaker bonuses, casinoin bookmaker, casinoin bookmaker, casinoin sports betting, casinoin bookmaker, casinoin bookmaker,

Q1CY22 was a muted quarter for ACC (Ebitda plunging 26% y-o-y; though up 14% q-o-q). However, most of this is priced in in our view given Ebitda broadly matched Street’s and our expectation. In the wake of sharp price hikes across regions – to pass on industry-wide impact of surging fuel prices – we see limited risk to earnings.

The recent buzz of a potential stake sale by global parent Holcim Group (HG) should drive outperformance, in our view. The current valuations of $100 EV/t deserve a premium (in case of a sell-off) given ACC is one of the strongest brands and has a pan-India network. With ACC’s efforts to enhance efficiency being in focus, we maintain ‘Buy’.

Muted quarter on expected lines: (i) Volumes slipped 3.3% y-o-y being >2% below estimates. (ii) Cement realisations inched up 0.4% q-o-q (up 6% y-o-y). The read-across for the industry can be treated as negative given the top-line disappointment. (iii) Variable cost/t (excluding freight) surprised, falling 2.6% q-o-q with better inventory management. However, freight cost/t rose 6% q-o-q. (iv) Staff cost dipped 6% y-o-y and 5% q-o-q. v) Overall cost/t stood flat q-o-q but shot up 14% y-o-y. (vi) Blended Ebitda/t at Rs 822 is down 24% y-o-y .

Outperformance in store: We expect ACC to outperform given: (i) Undemanding valuations of 10.9x CY22e and 8.8x CY23e EV/Ebitda. (ii) In case the parent’s stake is on the block, ACC deserves a premium for its strong brand and pan-India network. We continue to value ACC at 13x EV/Ebitda and maintain ‘BUY/SO’.



Author: Howard Caldwell