ACC - Singed by Mine Closure, but Respite Anticipated; Result Update Q4CY14 :: Edelweiss

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

ACC’s Q4CY14 EBITDA of INR2.5bn dipped 30% YoY (in line with our estimate) impacted by temporary shutdown of its limestone mines in East. ACC was forced to buy clinker from the open market to protect market share, which impacted raw material and freight cost. However, management expects these mines to restart soon following provisions in MMDRA ordinance, which permits mining on such mines till 2030. Volumes (down 1.5% YoY), realisations (down 1.8% QoQ) and other costs broadly matched our estimates, leading to an EBITDA/t of INR310 (down 43% QoQ). PAT stood 2x above estimates due to tax credits of previous years. With current cement prices being ~6% higher than Q4CY14 and an expected restart of mines in the near term, we maintain FY15 EBITDA estimates. With slowing capacity additions, low fuel cost and an expected demand revival, we maintain our positive view on the sector.

Mining ban in East dents EBITDA

Since October 2014, ACC had suspended limestone mining operations at 2 of its plants in the East following a notice from the states of Jharkhand and Odisha. ACC was forced to buy clinker from the market and also source the raw material from its other plants leading a surge in raw material and freight cost. Ergo, the EBITDA dipped 30% YoY. Albeit, post the recent MMDRA ordinance, the mining lease stands regularised and the company expects mining operations to commence soon.

LINK
https://www.edelweiss.in/research/ACC--Singed-by-Mine-Closure,-but-Respite-Anticipated;-Result-Update-Q4CY14/28233.html