ACC Ltd Result Analysis Q1 FY2021
CMP: 1,379 (As on 21-07-2020 @ 15:39)
Total revenue from operations 2,602 Cr
4,150 Cr (-37.31%) YoY | 3,502 Cr (-25.71%) QoQ
Six month ending revenue: 6,104 Cr Vs. 8,069 Cr (-24.34%)
Net Profit of 270.9 Cr
455.7 Cr (-40.72%) YoY 323.02 Cr (-16.41%) QoQ
Six months ending net profit: 594 Cr Vs.802 Cr (-25.69%)
EPS (in Rs.) 14.39
24.20 YoY |17.16 QoQ
Six months ending EPS: 31.55 Vs. 42.58
View: Average result and in line with the expectation. YoY and QoQ revenue and profit both have declined but margin improved in this quarter.
Business Updates & Highlights:
Q2FY21 EBITDA was around INR 513.1 Cr Vs. 783.4 Cr in Q2FY20 Vs. 586.1 in Q1FY21 Cr in QoQ therefore declined by 81.7% in YoY and 12.7% in QoQ. EBITDA margin is around 19.7% Vs. 18.9% in YoY Vs. 16.7% in QoQ. EBITDA margin improved in YoY and QoQ.
EBITDA for six month ending 2020 is around INR 1,110 Cr Vs. 1,314 Cr in six month ending 2019. Therefore declined by 15.5% in YoY. EBITDA margin is around 18.1% Vs. 16.2% in 2019
Financial
ROE and ROCE is around INR 12% and 19% respectively and book value per share is around INR 615 and share is currently trading at 2.2x of its book value. Company is currently trading at annualized PE of 24 which is average as per Industry benchmark. Promoter holding is around 54.5% in the company which is strong and stable. FIIs and mutual fund hold around 8.1% and 11.7% in the company. Company is very strong operating cash flow for the six month ended June 2020 which was around INR 558 Cr Vs. 413 Cr in June 2019. Liquidity position is also very sound in the company.
Position: Share support price is INR 1,250. Long term investor should continue with the company.
Share View: Share price high 1,707 (52 week) and now 1,330. ACC Limited (ACC) is a leading player in the Indian building materials space, with a pan-India operational and marketing presence. Synonymous with cement. The management control of company was taken over by Swiss cement major Holcim (now LafargeHolcim) in 2004. ACC operated as subsidiary of Lafarge Holcim. On 1 September 2006. The company is only cement company to get Superbrand status in India
Opportunities: Strong operating cash flows for the half year ended June 2020. Due to strict cost control measure company margin was also improved in this quarter as compared to YoY and QoQ. Follow high corporate governance model and holding by LafargeHolcim which is World’s largest cement company. Due to Covid-19 outbreak and strictly lockdown in the month of April 2020 the topline impacted in this quarter. Govt is planning to increase the infra spending and this can be good for long term perspective.
Risk: Covid-19 outbreak and continuously strong in country and part of some states have further extended the lockdown can further impact for Q3 as well. Real estate slower growth especially for commercial space can also impact the topline in upcoming quarters. Further company has contingent liabilities of around INR 1,147 Cr which appeal is pending in Hon’ble Supreme court against COMPAT.
Disclaimer: The
information provided herein is based on publicly available information and
other sources believed to be reliable, but involve uncertainties that could
cause actual events to differ materially from those expressed or implied in
such statements. The document is given for general and information purpose and
is neither an investment advice nor an offer to sell nor a solicitation. While
due care has been exercised while preparing this document, we do not warrant
the completeness or accuracy of the information. We will not accept any
liability arising from the use of this material. The recipient of this material
should rely on their investigations and take their own professional advice.
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