Similar to Q1, ACC posted a further strong set of final results in Q2CY21. Despite the influence of COVID-19 restrictions on volume (-14% q-q), standalone Ebitda at Rs 8.7 bn (+2% q-q, +67% y-o-y), came in 15% /20% above our / Bloomberg consensus estimates. The crucial purpose for the beat was as soon as once more reduce per unit opex (+2% q-o-q). And there was as soon as once more favourable inventory modify (Rs 2.1 bn or ~Rs 310/t). With reduce charges and blended realisation increasing 5.5% q-o-q, per unit Ebitda at Rs 1,279 (+19% q-o-q) was at a record higher. For H1, standalone Ebitda/normalised PAT had been up 56%/ 92% y-o-y, driven by 31% y-o-y larger volumes (aided by low base) and 19% y-o-y larger per ton Ebitda at Rs 1,171.
With increasing input charges, onset of monsoon, record Ebitda/t unlikely to sustain: With ~5% y-o-y larger cement realisations, expense-saving initiatives and favourable inventory adjustments, ACC’s blended Ebitda/t in H1CY21 was up sharply. We count on ACC’s Ebitda/t to decline drastically in H2CY21F, for CY21F Ebitda of Rs 1,021/t .
Raise CY21F/22F core Ebitda by 10%/5%: With reduce opex in H1, we raise CY21F core-Ebitda by 10%, though our CY22F core Ebitda increases by 5%. With larger Ebitda and reduce depreciation, our CY21F/CY22F earnings boost by 14%/9%. We count on sharp 34% y-o-y boost in CY21F earnings. We continue to worth ACC at 10x core Ebitda, but roll forward to Jun-23F (from Dec-22F). Driven by larger core Ebitda and roll-forward, our TP increases to Rs 2,215 (from Rs 1,930), implying 3% upside. With margins probably to have peaked, we preserve Neutral.