Hold ACC; target Rs 1427: Firstcall Research

Firstcall Research has recommended hold rating on ACC with a target price of Rs 1427 in its March 13, 2013 research report.

"ACC Concrete a division of ACC Ltd introduced 2 breakthrough solutions UTWT 24 and Speedcrete for instant road surface overlay and repair in India. The company's net sales registered a 2.51% increase and stood at a record Rs. 27681.10 million from Rs. 27004.46 million over the corresponding quarter last year. ACC Ltd has recommended a final dividend of Rs.19/- per share. The total dividend for the year 2012 thus amounts to Rs.30/- per share. ACC has approved the payment of Technology and Knowhow fees to Holcim Ltd, Switzerland at the rate of 1% of the net annual sales of the Company. Jamul Project with 2.79 MTPA Clinker capacities &5.15 MTPA cement capacity is under implementation and is expected commissioning by 2015. Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 7% over 2010 to 2013E respectively. The company's net profit declines to Rs.2512.40 million against Rs.4632.03 million in the corresponding quarter ending of previous year, a decrease of 45.76%. Revenue for the quarter rose 2.51% to Rs.27681.10 million from Rs.27004.46 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.13.37a share during the quarter, registering 45.76% decrease over previous year period. Profit before interest, depreciation and tax is Rs.4586.20 millions as against Rs.4850.30 millions in the corresponding period of the previous year. Outlook and Conclusion: At the current market price of Rs.1263.00, the stock P/E ratio is at 17.82 x CY13E and 15.07 x CY14E respectively. Earning per share (EPS) of the company for the earnings for CY13E and CY14E is seen at Rs.70.88 and Rs.83.80 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 7% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 9.18 x for CY13E and 7.94 x for CY14E. Price to Book Value of the stock is expected to be at 2.73 x and 2.31 x respectively for CY13E and CY14E. We recommend 'HOLD' in this particular scrip with a target price of Rs 1427 for Medium to Long term investment," says Firstcall Research report. Institutional holding more than 40% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment

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