ACC's net profit dips 7% in Q4 FY20

ACC reported EBITDA of Rs5.8bn vs. estimated Rs4.8bn led by Rs200/ton qoq reduction in variable costs. Employee cost too is down Rs240mn qoq. Volume decline was at 12.5% yoy vs. estimated 12% decline. Realization was up 0.9% qoq (0.2 % yoy) vs. estimated increase of 1.5% qoq. EBITDA was up 8.7% yoy with 2.9pp yoy improvement in OPM. EBITDA/ton was at Rs823 vs. Rs700/Rs606 in Q1/Q4CY19. Interest expense was at Rs80mn vs. Rs209mn/Rs292mn in Q1/Q4 CY19. Adjusted Profit was up 34.3% yoy. Variable cost reduction was expected to be Rs50/ton and need to watch for sustainability of a steep decline reported in the quarter. We have a Buy rating on the stock with a price target of Rs1,287 (CMP: Rs1,138).