Revenue & EBIT marginally below estimates, PAT beats expectations even after excluding one-time exceptional gain Revenue for Q4FY25 came at INR 3.5Bn, up 12.8% YoY and 0.2% QoQ (vs consensus est. at INR 3.6Bn). EBIT for Q4FY25 came at INR 1.2Bn, up 61.3% YoY but down 6.1% QoQ (vs consensus est. at INR 1.2Bn). EBITDA margin was up 1033bps YoY but down 231bps QoQ to 34.4% (vs Consensus est. at 34.8%). PAT for Q4FY25 stood at INR 1.8Bn, up 81.3% YoY and 49.3% QoQ (vs consensus est. at INR 1.2Bn). Revenue growth driven by price hikes on Gold & Platinum plans: Annualized revenue per paying supplier (ARPU) rose 11% YoY to INR 62,000, driven by higher contributions from top-tier (mainly Platinum) clients. Growth was supported by annual price hikes (10%) on Gold & Platinum plans, a variable pricing model for Platinum users, and improved lead quality through operational tweaks. These initiatives are expected to continue boosting ARPU, especially in the high-value segment. Elevated churn in silver category remains concern for growth: INMART continues to face high churn in its Silver customer tier, especially among first-year users, with a monthly churn rate of 6–7% persisting. Net supplier additions have stayed below 2,000 for the seventh straight quarter. While efforts are underway to improve product-market fit and attract better-quality users, results are yet to show. No price hikes have been made in this tier, and reducing churn remains key to driving customer growth and maintaining a balance with ARPU improvement. ARPU-driven collections growth despite 0% customer addition: Management highlighted that collections growth has stabilized at 9–10% after a temporary dip in Q2FY25. This growth is currently driven almost entirely by higher ARPU, with customer additions remaining flat. The slowdown is attributed to high churn and weak net additions. While management does not consider this 8–10% pace the new normal, efforts are underway to reignite growth. In the near term, collections are expected to grow at a similar rate, largely supported by ARPU, until customer acquisition improves. EBITDA margin at 40% in Q4, normalization expected with investments & growth initiatives: EBITDA margins stood high at 40% in Q4FY25 and 39% for FY25, supported by lower customer acquisition costs and operating leverage from limited new customer additions. Consolidated margins were slightly lower at 37% and 38%, respectively. Management expects margins to stay elevated at 38–40% in the near term as the focus remains on reducing churn. However, with a planned pivot toward customer base expansion and ARPU growth, margins are expected to gradually settle at a sustainable 33–35% due to higher marketing and growth investments. View and Valuation: INMART's performance is characterized by reliance on ARPU-led growth & efforts to address foundational customer acquisition challenges. Although revenue growth has moderated, mainly due to lower churn rates among Gold & Platinum subscribers, the silver tier is yet to perform despite the ongoing efforts. EBITDA margins remained elevated & expected to normalize in upcoming quarters. We expect Revenue/ EBITDA/ PAT to grow at a CAGR of 11.0%/ 10.7%/ 6.6% over FY25-FY27E & revise our rating to ADD with an upward revised target price of INR2,475 implying a PE of 24x (maintained) on FY27E EPS of INR103.2.

Well thought out strategy being executed! We maintain our BUY rating and raise the target price to INR 625 for ACEM, considering 1) INR 300/t cost reduction over FY25-28E due to renewable energy and logistics optimization, 2) higher premium product share boosting realizations, and 3) the turnaround of Sanghi, Penna, and Orient Cement assets. We now use an EV/CE valuation framework, forecasting a 27.3% CAGR in EBITDA over FY25-28E, supported by volume growth and moderate realization increases. ACEM’s strong market presence, recent mergers, and ongoing capacity expansion are positive, but the complex corporate structure remains a concern. Risks include rising raw material costs, construction slowdowns, and volatility in petcoke prices. Q4FY25: Revenue inline, while EBITDA & Profitability were a beat ACEM reported Q4FY25 revenue of INR 56,814 Mn (+18.8% YoY, +12.7% QoQ) and EBITDA of INR 10,382 Mn (+30.1% YoY, +72.9% QoQ), surpassing CEBPL estimates of INR 57,848 Mn and INR 8,534 Mn, respectively. Market expectations for Q4 EBITDA were in the range of INR 8,300 – 9,500 Mn, making the reported numbers better than anticipated. Volumes for Q4 were 11.6 Mnt (vs CEBPL est. 11.4 Mnt), up 22.1% YoY and 14.9% QoQ. Realization/t was INR 4,898/t (-2.7% YoY, -1.9% QoQ), lower than CEBPL’s estimate of INR 5,068/t. Total cost/t was INR 4,003/t (-4.5% YoY, -9.0% QoQ). EBITDA/t came in at INR 895/t (vs CEBPL est. INR 748/t), up 6.6% YoY and 50.5% QoQ. Targeting INR300/t cost reduction between FY26 to FY28: ACEM is on track to achieve its target total cost of INR 3,650/t by FY28, having already reduced costs by ~INR 175/t. Power & fuel costs are expected to decrease by ~INR 150/t, supported by the company's goal of achieving 30% WHRS capacity by FY28. Long-term supply agreements are also expected to reduce raw material costs by ~8-10%. With a continued focus on cost optimization, we forecast ACEM’s EBITDA/t to grow at a CAGR of 24.5%, reaching INR 1,157/t by FY28. Focusing on premium push and aggressive capacity expansion to drive volume growth: ACEM’s consolidated cement capacity is expected to grow from 100 Mnt at the end of FY25 to 140 Mnt by FY28, with a near-term target of 118 Mnt by FY26. The company aims to increase its share of premium products to 35% by FY26, up from 29% in FY25. With strong capacity expansion, a focus on premium products, and improving cement realizations, we project ACEM’s revenue to reach INR 221.1 Bn in FY26, INR 242.3 Bn in FY27, and INR 265.4 Bn in FY28.

Continue to maintain our positive stance We maintain our BUY rating on ACC with a target price of INR 2,475/share, based on a revised EV to Capital Employed (EV/CE) valuation framework. We forecast 35.5% EBITDA CAGR over FY25–28E, driven by strong volume growth (12%/8%/8%) and stable realizations. Our valuation uses a conservative EV/CE multiple of 2.4x, reflecting a ROCE improvement from 5.7% in FY25 to 14.9% in FY28E. Implied FY28E valuation multiples are EV/EBITDA: 13.3x, P/BV: 2.1x, and P/E: 15.5x. Risks include a slowdown in construction due to heatwaves and a sharp rise in petcoke prices. Q4FY25 Volume growth impressive, EBITDA/t in line: ACC reported Q4FY25 Revenue of INR 59,486 Mn (up 12.1% YoY, 14.9% QoQ) and EBITDA of INR 7,404 Mn (flat YoY, but up 90.2% QoQ), largely in line with market expectations. Total volume stood at 11.9 Mnt, higher than estimated 11.5 Mnt, marking a solid 14% YoY and 11.2% QoQ growth—one of the key positives in the results. Realization came in at INR 4,999/t (-1.6% YoY, +3.3% QoQ), slightly above CEBPL's estimate of INR 4,934/t. Total cost was INR 4,377/t (+0.2% YoY, -2.2% QoQ). EBITDA/t stood at INR 622/t (vs CEBPL est. INR 614/t), down 12.8% YoY but up 71% QoQ. Focusing on EBITDA/t expansion via cost reduction initiatives: ACC aims to cut costs by INR 500/t by FY28 through its Parvat initiatives. This includes an ~INR 80/t saving in power and fuel costs in FY26, driven by more green power and a 200 MW solar plant at Kavda. Raw material costs are expected to drop by INR 50/t in FY26 due to long-term tie-ups, while logistics optimization will provide further savings. These efforts are expected to boost EBITDA/t by ~INR 150/t in FY26. ACC's EBITDA is forecasted to grow at a CAGR of ~35.5% from FY25 to FY28. Volume to grow at 9.3% CAGR over FY25- 28, driven by capacity expansion; profitability to improve on positive pricing outlook: ACC plans to increase its capacity from 39.9 MTPA to 45 MTPA, with a capex of INR 10,000 Mn in FY26, mainly focusing on the East and Central regions. Cement prices are rising, with a ~INR 15 increase in April and further hikes expected. We anticipate a ~1.5% growth in realizations for FY26. With strong volume growth and better realizations, ACC’s revenue is expected to grow at a CAGR of 10.2% from FY25 to FY28.