We value ACC at 13.5x Sep26 EV/EBITDA. Our target multiple is at 1SD above 10-yr mean. We ascribe a premium to mean given the re-rating in larger cement majors and Adani’s cost focus. We maintain a discount to the large pan India players to account for difference in scale. Our target multiple would imply an EV/t of $115 (~40mt capacity).

Based on our sensitivity analysis, 1% change in cement realizations impacts EBITDA by ~6.5%; 1% change in volumes would impact by ~1.7%. Downside risks that could impede the stock from reaching our target price include: 1) lower pricing, 2) lower volumes, 3) higher costs, and 4) CCI penalty.