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ACC’s Q1FY25 EBITDA declined 12% YoY/19% QoQ to Rs6.8bn, in line with our estimates, as the higher than expected volumes were offset by the lower than expected realization. EBITDA/t declined 19% YoY/17% QoQ to Rs664 (Emkay est: Rs715). Volume growth surprised positively, with 9% YoY growth to 10.2mt, largely led by increased MSA transaction with Ambuja/Sanghi Cement. Cement realization declined 8% YoY/3% QoQ to Rs4,722. Total cost/t declined 7% YoY/stood broadly flat QoQ at Rs4,379. Factoring-in the lower realization, we cut our FY25/FY26 EBITDA estimates by 13%/7%, respectively, with unchanged Jun-25E TP of Rs2,900/sh, based on 13x EV/E. We maintain BUY on ACC, on favorable valuations, as the stock is trading at 12.2x FY26E EV/E. We continue to peg Ambuja above ACC in our Cement universe.

Result Summary

ACC’s volume trajectory remained healthy in Q1FY25, with 9% YoY growth (declined 2% QoQ) to 10.2mt, on likely higher MSA with Ambuja and Sanghi. Cement realization (including incentives) declined 8% YoY/3% QoQ to Rs4,722. Total cost/t declined 7% YoY/was broadly flat QoQ, standing at Rs4,379. Accordingly, blended EBITDA/t declined 19% YoY/17% QoQ to Rs664. Cash and cash equivalents declined by Rs19bn QoQ to Rs27.5bn as of Jun-24, as the company largely utilized these to capitalize on opportunities to buy input raw materials and for maintenance of capex.

What we liked: Strong volume growth

What we did not like: Weak performance in the RMC division

Other operational highlights

1) Fuel cost in Q1FY25 stood at Rs1.73/kcal vs. Rs2.14/Rs1.91 in Q1FY24/Q4FY24, respectively. 2) For the RMC segment, revenue fell 9% YoY (up 4% QoQ) to Rs3.3bn, with volumes declining 11% YoY/increasing 3% QoQ) to 0.68mn CBM. ACC’s EBIT increased ~6x YoY/40% QoQ to Rs230mn. 3) WHRS as a % of total power consumption increased by 160bps YoY to 10% in Q1FY25. 4) Thermal value reduced, from 757kcal to 739kcal, with further improvement expected in the Quarters ahead. 5) WHRS at Ametha, with 16.3MW capacity, was commissioned in Q3FY24 and work on WHRS facilities at Chanda (18MW) and Wadi (21.5MW) is on track, with commissioning set for Q2FY25. This will increase overall capacity to ~86MW, with total share of 25% in the power mix.

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