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Mix Set of Numbers; Maintain BUY

Est. Vs. Actual for Q4FY25: Revenue – BEAT; EBITDA Margin – MISS; PAT– BEAT

Change in Estimates post Q4FY25 (Abs.)

FY26E: Revenue: 0%/0%; EBITDA: -3%/0%; PAT: -1%/0%

Recommendation Rationale

* Strong volume growth: In Q4FY25, the company achieved a 14% YoY increase in volume, reaching 11.90 mtpa, driven by higher trade volumes and a 7% YoY increase in premium product volumes, further strengthening its market leadership. It maintained its dominant position across key markets. The company’s capacity expansion plans remain on schedule, and they are expected to support sustained volume growth in the future. It is projected to deliver a volume growth of 8% CAGR over FY24-FY27E.

* Lower realisation impacts EBITDA margins: During the quarter, blended cement prices declined by 2% YoY, settling at Rs 5,098/tonne. This negatively impacted the EBITDA margin, leading to a decline of 180 bps YoY despite stable production costs.

* Robust cement demand to sustain: Cement demand is expected to remain strong, with the industry projected to grow at a CAGR of 7-8% over FY24-FY27. This growth is likely to be driven by higher spending on infrastructure projects, affordable and rural housing initiatives, an increase in private capital expenditure, and sustained demand from the real estate sector.

Sector Outlook: Positive

Company Outlook & Guidance: Based on the growth trends observed in Q3 and Q4FY25, cement demand during FY26 is projected to continue benefiting from the momentum gained by government spending on infrastructure and construction activities. The growth is anticipated to range between 7% and 8% for the coming fiscal year, driven by ongoing consumption demand in the housing and infrastructure segments and the favourable impact of the pro-infra and housing Budget 2025.

Current Valuation: 11x FY27E EV/EBITDA (Earlier Valuation: 11x FY26E EV/EBITDA)

Current TP: Rs 2,420/ share (Earlier TP: Rs 2,380/share)

Recommendation: We maintain our BUY rating on the stock.

Alternative BUY Ideas from our Sector Coverage: Dalmia Bharat (TP-2,260/share)

Financial Performance

ACC reported a mix of numbers. Revenue was up 12%, driven by higher volume, while EBITDA/PAT was lower by 1%/21% owing to lower realisation during the quarter. YoY. The company reported an EBITDA margin of 13.7% against an expectation of 14.7%. The company posted a 12% YoY revenue growth, supported by a 14% volume growth to 11.9 mtpa, attributed to increased trade volumes and higher sales of premium products.

ACC's blended EBITDA per tonne stood at Rs 698, down 13% YoY, owing to lower realisation YoY. Blended realisations per tonne were Rs 5,098, down 2% YoY and up 5% QoQ. Cost per tonne remained flat YoY at Rs 4,400. The company reported a profit of Rs 751 Cr, down 21% YoY, though it was up 43% against our expectation, led by higher other income.

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