🧂 At a Glance
ACC Ltd — one of India’s OG cement giants — has gone from being a Holcim baby to becoming part of Gautam Adani’s construction Avengers. It sells cement by the truckload (literally), runs ready-mix concrete plants, and is supposed to be a key piece of India’s infrastructure boom. So why is the stock still 30% down from its highs while Adani stocks are flying like Tesla? Let’s break down 5 years of operations, margins, capex, and whether it’s time to load ACC or leave it for UltraTech.
🏢 Business Snapshot: Building India, Brick by Brick
- 👷 Core Segments:
- Cement (94%): Gold Range (premium), Silver Range (mass)
- RMC (6%): Ready Mix Concrete for infra & real estate
- 👣 Footprint:
- 20+ cement plants
- 80+ RMC plants
- Pan-India presence, especially in north and central India
- 🧬 Parent DNA:
- Owned by Ambuja Cements, which is controlled by Adani Group
- Ongoing synergies in logistics, raw materials, and marketing
📊 5-Year Financial Recap: From Holcim to Hiccups to Hope?
| Metric | FY21 | FY22 | FY23 (15M) | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 13,786 | 16,152 | 22,210 | 19,959 | 21,762 |
| EBITDA (₹ Cr) | 2,355 | 2,998 | 1,925 | 3,062 | 3,061 |
| EBITDA Margin | 17% | 19% | 9% | 15% | 14% |
| PAT (₹ Cr) | 1,430 | 1,863 | 885 | 2,335 | 2,402 |
| EPS (₹) | 76.2 | 99.2 | 47.1 | 124.3 | 127.9 |
| Dividend / Share | ₹13.5 | ₹13.5 | ₹10 | ₹7.5 | ₹7.5 |
| Dividend Payout % | 18% | 59% | 20% | 6% | 6% |
📌 TL;DR:
- Margins dipped post-Adani acquisition due to input cost inflation (2022–2023)
- FY24 & FY25 saw EBITDA margin recovery to 14–15%
- Earnings back to ATH, but dividends were mysteriously cut 🤔
💸 What’s Going On with Dividend Payouts?
Let’s just say — Adani doesn’t believe in dividends (unless you’re Adani Ports).
| FY | EPS | Dividend | Payout % |
|---|---|---|---|
| 2021 | ₹76.16 | ₹13.5 | 18% |
| 2022 | ₹99.21 | ₹13.5 | 13.6% |
| 2023 | ₹47.13 | ₹10.0 | 21% |
| 2024 | ₹124.3 | ₹7.5 | 6% 👀 |
| 2025 | ₹127.9 | ₹7.5 | 6% 👀 |
🧠 Likely reason:
- Aggressive capex by Adani Cement vertical
- Retaining cash for debt repayment, plant upgrades, logistics fleet
🏗️ Capex Plans: Cementing the Future?
- ACC + Ambuja + Adani Cement = 110+ MTPA capacity (target: 140+ MTPA by FY26)
- ACC investing in:
- New plants in Ametha (Madhya Pradesh)
- Expanding grinding capacity in UP, HP
- Waste Heat Recovery Systems (green power)
- Synergies in fly ash, limestone mines, railway sidings
🏦 Estimated capex: ₹3,000–₹4,000 Cr over 2–3 years across the group
📉 Stock Performance: Pain in the PE?
| Metric | Value |
|---|---|
| CMP | ₹1,861 |
| P/E (TTM) | 15.1x |
| P/B | 1.9x |
| ROCE | 17.4% |
| ROE | 13.2% |
| Market Cap | ₹34,927 Cr |
📉 Price Trend:
- 5Y CAGR: 8%
- 3Y CAGR: -3%
- 1Y: -30% 😬
Despite profits soaring, the stock has corrected — clearly, investors don’t love low dividends, high capex, and Adani overhang.
📦 Operating Metrics: Can It Compete with UltraTech?
| Company | EBITDA Margin | ROCE | P/E |
|---|---|---|---|
| ACC | 14% | 17.4% | 15x |
| UltraTech | 19% | 10.9% | 54x |
| Ambuja | 18% | 10.5% | 33x |
| Dalmia | 12% | 5.6% | 55x |
| JK Cement | 13.9% | 13.9% | 57x |
✅ Positives:
- Valuation is cheap vs peers
- Margins have recovered
- ROCE is highest in the sector
❌ Negatives:
- Weak dividend policy
- Market doesn’t reward Adani ownership yet
- Cement sector cyclicality + EV transition impact infra timelines
🔍 Shareholding Pattern
| Holder | Mar 2023 | Mar 2025 |
|---|---|---|
| Promoter | 56.69% | 56.69% |
| FIIs | 10.05% | 4.83% 👎 |
| DIIs | 19.51% | 24.92% 👍 |
| Public | 13.57% | 13.41% |
📌 FIIs are pulling back. But DIIs (mutual funds, insurance giants) are buying into the “cheap but cash-rich” thesis.
🧮 Fair Value Estimate (EduInvesting Style™)
📘 Method 1: Historic P/E Mean
- 5-year avg EPS (normalised): ₹90
- Sector P/E average: 25x (ex-UltraTech)
- Conservative P/E for ACC: 18x
👉 ₹90 × 18 = ₹1,620
🧾 Method 2: Yield Adjusted + P/B Anchored
- ROE: 13%
- Book Value: ₹988
- Fair P/B (RoE/Cost of Equity ~12%): 1.8x
➡️ ₹988 × 1.8 = ₹1,778
📊 EduInvesting Fair Value Range = ₹1,600 to ₹1,800
CMP ₹1,861 is slightly above the justified band — likely pricing in future volume + margin expansion. But upside will depend on Adani unlocking synergy & improving payout.
⚖️ TL;DR — ACC Ka Cement Mazboot Hai, But Return Thoda Loose Hai
- 📈 Profit: All-time high
- 🧱 Volume: Expanding under Adani Group
- 💸 Dividend: Cut to 6% payout despite strong EPS
- 📉 Stock: -30% in 1 year due to investor fatigue
- 🤝 FIIs exiting, DIIs entering
✅ Ideal for: Long-term investors betting on infra & Adani cement synergy
❌ Not for: Dividend lovers or those expecting fast re-rating
✍️ Written by Prashant | 📅 18 June 2025
Tags: ACC Ltd, Adani Cement Stocks, ACC 5-Year Recap, Cement Sector India, Infra Stocks, ROCE Leaders, Low Dividend Stocks, ACC Fair Value, Ambuja ACC Merger, Cement Margin Trends
