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What should investors do with ACC post September quarter results: buy, sell or hold?

ACC reported a 21 percent decline in consolidated PAT at Rs 450 crore from Rs 569 crore in the previous quarter but year-on-year, profit rose 24 percent

October 20, 2021 / 09:50 AM IST
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ACC added 3 percent to the stock price in the early trade on October 20, a day after the cement major came out with its September quarter earnings.

ACC  reported a 21 percent decline in the consolidated profit after tax at Rs 450 crore against Rs 569 crore in the previous quarter. On a YoY basis, profit rose 24 percent from Rs 364 crore.

Consolidated revenue was 4 percent lower at Rs 3,749 crore for the quarter against Rs 3,885 crore in the previous quarter. The revenue, however, grew 6 percent from Rs 3,537 crore reported during the same period last year.

Cement volumes grew marginally by a percent year-on-year to 6.57 million tonnes compared to 6.49 million tonnes in the year-ago period.

RMC volumes grew by 48 percent from 0.46 million cubic metres last year to 0.68 million cubic meters in the September quarter.


Revenue from cement increased 3.62 percent to Rs 3,495.49 crore, while that from ready-mix concrete jumped 55.2 percent to Rs 305.07 crore against Rs 196.57 crore earlier.

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Here is what brokerages have to say about the stock and the company after September quarter earnings:


The research house has maintained an “outperform” call with the target at Rs 2,591.

It raised CY22 earnings estimate by 1 percent as infra and housing momentum support constructive demand outlook. The cost inflation could be reflected in Q4 earnings.


The broking firm has kept “overweight” rating with the target at Rs 2,450 as Q3 was a beat driven by narrower-than-expected ASP decline.

The company, so far, has shown strong cost delivery, while efficiency gains become more critical from here.

The next quarter could see muted growth as monsoon withdrawal has been delayed this year.

Goldman Sachs

The firm has kept “neutral” call on the stock with the target at Rs 2,200.

Its volume and EBITDA growth are likely to lag peers. The firm prefers Ambuja, given its exposure to more concentrated markets in the west and the north.


CLSA has maintained “buy” call with the target at Rs 2,765 as the third quarter was slightly better than estimates.

It expects full cost-inflation results to reflect in CY22, while stock trades at a high discount to its peers.

The master supply agreement (MSA) benefits and cost-saving initiatives were evident in the earnings report, it evident.

Elara Capital

ACC is well poised to seize benefits of improving industry fundamentals, with its pan-India presence and strong brand positioning, it has said.

Ongoing capacity addition and efficiency improvement bode well and are likely to prop future earnings.

We reiterate accumulate and largely maintain CY21E earnings but have trimmed CY22E estimates around 7 percent to factor in higher operating costs.

We introduce CY23 estimates and raise target price to Rs 2,526 from Rs 2,464 based on EV per tonne of Rs 10,000 (unchanged), on September 2023E.

Prabhudas Lilladher

ACC continued its strong work on cost front through increased coverage of volumes under MSA reduction in energy consumption and optimisation of logistics network with reduction in lead distance.

We expect further cost reduction of Rs 115-120/t, largely on account of upcoming waste heat recovery/solar plants and upgradation of plants.

Driven by improved visibility on operations and attractive valuations, we reiterate our buy rating with target price of Rs 2,460 based on 12.5x EV/EBITDA of CY22e.

Motilal Oswal

The volume improved over CY17-19 after remaining stagnant over CY11-16, which helped to arrest the market share loss seen over CY09-16. Going forward, we expect ACC to benefit from capacity expansions in Central India.

We value ACC at 11x Sep’23E EV/EBITDA (in line with its long term average of 10.7x) to arrive at our target price of Rs 2,692. This implies a target EV/t of USD 133 on a CY22E basis. We maintain our buy rating.

ACC was quoting at Rs 2,318.60, up Rs 73.10, or 3.26 percent, on the BSE.

The share touched a 52-week high of Rs 2,506.35 on September 6, 2021 and a 52-week low of Rs 1,289.70 on September 7, 2020.

It is trading 7.49 percent below its 52-week high and 79.78 percent above its 52-week low.

Disclaimer: The above report is compiled from information available on public platforms. advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Oct 20, 2021 09:50 am

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