Firm realisations, cost control boost ACC's performance in June quarter

Valuation of 7.6x its CY21 EV/Ebitda and EV/tonne of $79 appears attractive

ACC’s performance in the second quarter ended June 30, 2020 (Q2) bore the brunt of the lockdown as cement volumes declined. ACC’s accounting year is January-December. However, good realisations and cost-control measures lifted its operational performance.

While cement demand was significantly impacted in the peak months of April and May, some recovery was seen in June. Yet, ACC’s sales volumes declined 34 per cent year-on-year (YoY) and 27 per cent sequentially to 4.8 million tonne (mt) in Q2. However, it was in line with estimates of brokerages such as Emkay Global.

Cement realisations held the fort. Aided by production and pricing discipline