About the company: ACC Limited
ACC Limited was founded in August 1936 and has a pan-India operational footprint. It is one of the key players in the Indian construction material industry. The company primarily manufactures and sells cement, and ready-mixed concretes. It contributes significantly to the country’s landscape with 17 cement production units, over 90 ready-mix concrete factories, more than 6,600 brilliant employees, a broad distribution network of 50,000+ dealers and retailers, and a countrywide spread of sales offices.
ACC Ltd was acquired by the Holcim Group of Switzerland in 2005. Following that, Holcim and Lafarge merged in 2015 to establish LafargeHolcim, the world’s leading provider of building materials and solutions. They’ve all fueled each other’s growth, and the technology sharing that has resulted has helped them stay ahead of the competition.
| Headquarter | Mumbai, Maharashtra |
| Sector | Cement |
| Area of Operation | PAN India |
| MD & CEO | Mr Sridhar Balakrishnan (Feb 2020 – Present) |
| Chairman | Mr. N S Sekhsaria |
| Board of Committees | The Board comprises of Independent and Non-Independent Directors who are renowned professionals with diverse fields of expertise. One prominent and famous name among the group is Ms. Falguni Nayar who is serving as a Non-Executive and Independent Director. |
| Subsidiaries | • Bulk Cement Corporation (India) Limited (BCCI) • ACC Mineral Resources Limited (AMRL) • Lucky Minmat Limited • Singhania Minerals Private Limited |
| Competitors | • Ambuja Cements (₹ 72,704.40) • Ultratech Cements (₹ 208,797.65) • Dalmia Bharat (₹ 33,706 Cr.) |
Shareholding pattern: ACC Limited
Cement Industry:
• India is the world’s second-largest cement producer. It is responsible for more than 7% of the world’s installed capacity.
• Cement production reached 329 million tonnes (MT) in FY20, with 381 MT expected by FY22.
Profit and Loss Statement: ACC Limited
Standalone P&L:
| Dec-16 | Dec-17 | Dec-18 | Dec-19 | Dec-20 | Dec-21 (Expected) | |
| Revenue from Operations | 10,990 | 13,285 | 14,802 | 15,658 | 13,786 | 14,687 |
| Expenses | 9,532 | 11,370 | 12,754 | 13,245 | 11,431 | 12,049 |
| Operating Profit | 1,458 | 1,915 | 2,048 | 2,413 | 2,355 | 2,671 |
| Profit Before Tax | 885 | 1,310 | 1,510 | 2,053 | 1,709 | 2,061 |
| Net Profit | 658 | 924 | 1,520 | 1,377 | 1,430 | 1,785 |
| EPS in Rs | 35.06 | 49.23 | 80.97 | 73.35 | 76.16 | 95.07 |
Key Pointers:
- Expenses majorly include 18% Material cost & 24% Manufacturing cost.
- Numbers for Dec-21 are the expected numbers.
- Higher EPS compared to its immediate peers but lower than the industry leader
- The company’s manufacturing cost is at 24% which is the least amongst its mentioned peers.
- Revenue for 2020 is low for the whole sector due to the rise of covid.
- The company’s revenue growth is poor but has impressive profit growth.
Standalone Balance Sheet:
| Dec-16 | Dec-17 | Dec-18 | Dec-19 | Dec-20 | Jun-21 | |
| Equity Capital | 188 | 188 | 188 | 188 | 188 | 188 |
| Reserves | 8,625 | 9,168 | 10,344 | 11,356 | 12,511 | 13,394 |
| Borrowings | 0 | 0 | 0 | 0 | 84 | 99 |
| Total Liabilities | 13,394 | 14,846 | 16,056 | 17,136 | 18,200 | 19,120 |
| Fixed Assets | 7,568 | 7,280 | 7,088 | 7,027 | 6,694 | 6,756 |
| Investments | 117 | 95 | 104 | 116 | 129 | 147 |
| Other Assets | 5,448 | 7,202 | 8,466 | 9,547 | 10,828 | 11,674 |
| Cash Equivalents | 1,977 | 2,729 | 3,097 | 4,648 | 6,006 | 5,847 |
| Loans n Advances | 698 | 1,175 | 1,273 | 1,409 | 1,337 | 962 |
| Total Assets | 13,394 | 14,846 | 16,056 | 17,136 | 18,200 | 19,120 |
Key Pointers:
- Promoters haven’t diluted any shares in the past few years.
- Company raised some borrowing in its last FY, before that it was debt-free.
- Maintains a good cash equivalent.
Standalone Cash Flow:
| Dec-16 | Dec-17 | Dec-18 | Dec-19 | Dec-20 | |
| Cash from Operating Activity | 1390 | 1554 | 1118 | 2255 | 2219 |
| Profit from operations | 1480 | 1864 | 2036 | 2432 | 2538 |
| Inventory | -48 | -174 | -279 | 531 | 232 |
| Payables | 301 | 862 | 157 | -442 | -47 |
| Working capital changes | 183 | -91 | -391 | 270 | 388 |
| Direct taxes | -274 | -219 | -528 | -447 | -707 |
| Cash from Investing Activity | -533 | -379 | -364 | -321 | -535 |
| Fixed assets purchased | -522 | -535 | -520 | -549 | -749 |
| Interest Received | 65 | 70 | 92 | 177 | 187 |
| Other investing items | -129 | 3 | 5 | -27 | -6 |
| Cash from Financing Activity | -430 | -426 | -380 | -374 | -327 |
| Interest Paid | -46 | -42 | -41 | -57 | -40 |
| Dividend Paid | -319 | -319 | -282 | -263 | -263 |
| Other financing items | -65 | -65 | -58 | -54 | 0 |
| Net Cash Flow | 426 | 750 | 374 | 1559 | 1357 |
Financial Ratios: ACC Limited
Stock Price:
| 1. Current Price | ₹ 2,280.90 |
| 2. Market Cap | ₹ 42,759 Cr. |
| 3. Yearly fluctuation | ₹ 1,584 – 2,589 |
P/E Ratio:
(It indicates the market value of the stock as compared to the company’s earnings)
| 1. Company’s Ratio | 21.56 |
| 3. Ambuja Cements (₹ 72,704.40) | 21.80 |
| 4. Ultratech Cements (₹ 208,797.65) | 32.10 |
| 5. Dalmia Bharat (₹ 33,706 Cr.) | 28.60 |
ROCE Ratio:
(It basically indicates the profit company is making from its total capital invested)
| 1. Company’s Ratio | 16.0% |
| 3. Ambuja Cements (₹ 72,704.40) | 18.30% |
| 4. Ultratech Cements (₹ 208,797.65) | 15.1% |
| 5. Dalmia Bharat (₹ 33,706 Cr.) | 10.20% |
ROE Ratio:
(It basically indicates the profit company is making from its equity invested)
| 1. Company’s Ratio | 12.80% |
| 3. Ambuja Cements (₹ 72,704.40) | 10.50% |
| 4. Ultratech Cements (₹ 208,797.65) | 13.10% |
| 5. Dalmia Bharat (₹ 33,706 Cr.) | 10.40% |
Key Takeaways:
- Ambuja Cement is the major shareholder of the company.
- ACC Limited has a poor revenue growth but a impressive profit growth.
- ACC Limited is in par with the industry in term of profit growth.
- Promoters haven’t diluted any shares in the past few years.
- Undervalued in terms of the PE Ratio.
- Good ROE% & ROCE% when compared to its peers.
- 35% equity return in the past 1 year.
- Future of the company seems impresive and can give good returns in a long term.
Disclaimer: This shouldn’t be construed as a stock recommendation, investors discretion is advised while investing.
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