Analyst Corner: ACC- Volumes in line; blended realisations slightly lower sales

By: |
April 21, 2021 8:23 AM

Standalone revenue of 42.9bn (+23% y-y, +4% q-q) came in 1-2% below Bloomberg consensus estimate and our forecast, driven by 1% lower blended realisations, while cement volume was in line with our estimate.

ACC, standalone revenue of 42.9bn, higher EBITDA and lower depreciation., ACC cement sales, per unit fright costVolumes in line; blended realizations slightly lower ACC’s cement sales volume at 7.97mt

Standalone revenue of 42.9bn (+23% y-y, +4% q-q) came in 1-2% below Bloomberg consensus estimate and our forecast, driven by 1% lower blended realisations, while cement volume was in line with our estimate.

EBITDA of Rs 8.6bn (+47% y-y, +23% q-q) was 21%/26% above our/consensus estimates, driven by lower power/fuel and raw material costs (both 10% below us). 1Q standalone reported PAT at Rs 5.6bn (+74% y-y, +20% q-q) was 27%/30% above consensus/our estimates driven by higher EBITDA and lower depreciation.

Volumes in line; blended realizations slightly lower ACC’s cement sales volume at 7.97mt (vs our estimate of 8mt) was up 21% y-y driven by robust demand as well as lower base. Ready Mix Concrete (RMC) volume recovered further 14% q-q to 0.83 mcu. m (vs our estimate of 0.85) but are still down 11% y-y (-22%/-43%/-83% y-y in 4Q/3Q/2QFY20).

Blended realization at Rs 269/bag (flat q-q, +1% y-y) was 1% below our estimate of Rs 273/bag, while cement realization at Rs 244/bag (flat q-q, +7%y-y) was largely in line with our estimate of `245/bag. Lower power/fuel costs, inventory and freight costs boost per ton EBITDA margins Per unit power and fuel costs at `1,009 (+3% q-q, -10% y-y) was 9% below our estimate as higher fuel cost was offset by improvement in energy consumption/mix.

Per unit freight costs at Rs 1,366 (+3% q-q, -5% y-y) was 3% below our estimate as increased direct dispatches, warehouse and network optimization and procurement savings mitigate impact of higher diesel costs. Total raw material costs were ~10% below our estimate driven by lower inventory and lower purchase of traded cement. Overall, per unit variable cost at `3,311 (-3% q-q, +1% y-y) was 7% below our estimate of Rs 3,557.

Staff costs were -17% q-q to Rs 2.1bn (-1% y-y, 7% below our estimate), while other expenses at Rs 5.9bn (in line with our estimate), was +6% y-y.  Per unit fixed cost at `996/t (-6% q-q, -14% y-y) was ~2% below our estimate. Overall per unit opex at Rs 4,307 (-4% q-q, -3% y-y) was ~6% below our estimate of `4,570.

With lower per unit costs offsetting slightly lower blended realization, blended per unit EBITDA at Rs 1,078 (+21 y-y, +19%q-q) was 22% above our estimate of `885/t.

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