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Beat led by higher volume and realizations

* ACC’s 4QFY25 EBITDA declined 4% YoY to INR8.0b (15% beat), led by higherthan-estimated volume and realization. EBITDA/t fell ~16% YoY to INR673 (est. INR608). OPM contracted 2.2pp YoY to ~13% (est. ~12%). PAT (adjusted for exceptional gain) rose ~4% YoY to INR5.1b (est. INR4.1b).

* During the quarter, ACC invested INR6.4b in its subsidiary (ACC Mineral Resources or AMRL) by acquiring optionally convertible debentures. With these funds, AMRL has acquired 15 companies, which hold certain land parcels (including land parcels with mining rights) that are proposed to be developed for setting up manufacturing plants in line with the company’s future expansion plans. We would want to get more clarity on these investments and the company’s capex plan.

Sales volume above estimates; EBITDA/t at INR673 (vs. est. INR608)

* Revenue/EBITDA/PAT stood at INR60.1b/INR8.0b/INR5.1b (+11%/-4%/+4% YoY and +6%/+15%/+26% vs. estimates) in 4QFY25. Sales volumes were up 14% YoY at 11.9mt (+4% vs. estimate). Cement realization was down 3% YoY at INR4,696/t (+2% QoQ; +2% vs. estimate).

* Variable cost/t increased ~5% YoY (-1% QoQ; +2% vs. estimates.). Freight cost/other expenses per ton declined ~8%/6% YoY (in line). Overall opex/t remained flat YoY (down 2% QoQ; +1% vs. estimate). OPM contracted 2.2pp YoY to ~13% and EBITDA/t declined ~16% YoY to INR673.

* In FY25, revenue/EBITDA/adj. PAT stood at INR210.3b/INR23.8b/ INR13.4b (up 5%/down 22%/down 28% YoY). Sales volume was up 14% YoY, while realization declined ~8% YoY. EBITDA/t was down 32% YoY at INR565.

* OCF declined ~43% YoY to INR17.1b in FY25 due to an increase in WC. Capex stood at INR21.3b in FY25 vs. INR13.6b in FY24. It posted cash outflow of INR4.2b in FY25 vs. cash inflow of INR16.2b in FY24.

Key takeaways from press release

* Cement demand grew ~8% YoY in 4QFY25, led by a pick-up in construction activities, improvement in rural demand, stable demand in the real estate sector and higher government spending. It expects strong demand momentum to continue in FY26 and anticipates growth of ~7-8% YoY.

* Fuel consumption cost stood at INR1.47/kcal vs. INR1.91/INR1.68 in 4QFY24/3QFY25. The WHRS share stood at 13.5% vs. 8.2% YoY/10.0% QoQ. Overall green power share increased to 22.5% vs. 18.7% in 3QFY25. The AFR share increased to 11.0% vs. 9.6% in 3QFY25.

* Cash balance stood at INR35.9b as of Mar’25 vs. INR46.7b/INR25.3 as of Mar’24/Dec’24.

Valuation and view

* ACC posted higher-than-estimated profitability, led by higher volume growth (driven by higher MSA volume). However, the company’s profitability remains lower than its historical average due to weak realizations.

* We have a BUY rating on the stock and will review our assumptions after the concall on 29th Apr’25 at 2:00 pm. (Link).

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