ACC rating – Buy: Muted show in Q1CY22 along expected lines Q1CY22 was a muted quarter for ACC (Ebitda plunging 26% y-o-y; though up 14% q-o-q). However, most of this is priced in in our view given Ebitda broadly matched Street’s and our expectation. In the wake of sharp price hikes across regions – to pass on industry-wide impact of surging fuel prices – we see limited risk to earnings. The recent buzz of a potential stake sale by global parent Holcim Group (HG) should drive outperformance, in our view. The current valuations of $100 EV/t deserve a premium (in case of a sell-off) given ACC is one of the strongest brands and has a pan-India network. With ACC’s efforts to enhance efficiency being in focus, we maintain ‘Buy’. Outperformance in store: We expect ACC to outperform given: (i) Undemanding valuations of 10.9x CY22e and 8.8x CY23e EV/Ebitda. (ii) In case the parent’s stake is on the block, ACC deserves a premium for its strong brand and pan-India network. We continue to value ACC at 13x EV/Ebitda and maintain ‘BUY/SO’.
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FII and DII trades: Foreign Institutional Investors (FII) have been net buyers of domestic stocks for successive days now. On Wednesday, FIIs pumped in Rs 2,347 crore. Domestic Institutional Investors (DII) have been net sellers, pulling out Rs 510 crore yesterday.
IPO watch: Syrma SGS Technology enters the final day of bidding today. So far the issue, that opened last week, has been subscribed 2.27 times. Retail investors have subscribed their portion 2.66 times while NIIs have bid for their quota 3.58 times and QIB portion has been bid for 0.71 times.