- 25 Oct 2024
- ICICI Securities
ACC Q2FY25 - LOWER REALISATIONS IMPACTED OPERATIONAL PERFORMANCE
News: Revenue increased by 3.9% YoY to Rs 4608 crore, as volume growth of 14.8% YoY to 9.3 mtpa was partially offset by 9.5% YoY decline in net realization. Sequentially, revenue declined by 10.6% as volumes declined 8.8% QoQ while realisation fell 2% QoQ. Total cost/ton is down 6.3% YoY, mainly led by operational efficiencies. However, despite lower costs, EBITDA/ton declined by 31.8% YoY (-32% QoQ) to Rs 462/ton due to lower realization. Subsequently, EBITDA declined by 21.7% YoY (-37.9% QoQ) to Rs 429.2 crores. PAT declined by 39.1% YoY (-38.4% QoQ) to Rs 233.9 crores. For H1FY25, revenue is up only 1.3% YoY to Rs 9764 crores as 9% YoY lower realisation negates the impact of 11% volume growth. H1FY25 EBITDA/ton stands at Rs 575/ton (-23.7% YoY).
Views: Healthy volume growth of ~15% YoY during the quarter was mainly driven by additional trade sales (from group company Sanghi Industries). However, profitability was impacted significantly due to lower realisations. Going ahead, we expect operational performance to improve in H2FY25E, led by demand pick-up, improvement in prices and continuous focus on cost reduction. Moreover, supply agreement with Sanghi would also help in healthy volume growth. Company is also in process of expanding its capacity by 4 mtpa to 42.6 mtpa by FY26E (from 38.6 mtpa at present). EBITDA/ton is also expected to improve, led by focus on improving operational efficiencies.
Impact: Neutral