ACC soars over 4% on strong RESULTS, Expert says BUY for price target of Rs 2060, support at Rs 1850

Technical Analyst Nilesh Jain, who is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking, says that ACC is trading in a rising channel where the lower end of the channel is placed at Rs 1850 level which will act as immediate support whereas on the higher side one can expect a pullback towards Rs 2060 levels. One should wait for some correction for fresh longs. ACC Share price today is Rs 1955, up Rs 78 or 4.2% . ACC share price has moved from Rs 1900 to Rs 1955 in the last 1 week.

ACC Share price today: Prabhudas Lilladher says that ACC delivered strong performance on the cost front over the last couple of years despite constrained capacity and steep surge in coal/diesel prices. Prabhudas Lilladher maintains BUY rating with revised target price of Rs 2150.

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Prabhudas Lilladher sees scope for further cost reduction on front of

a)     power & fuel through increase in share of waste heat recovery (WHR), solar power and modernisation in kilns
b)     fixed costs
c)     increase in share of volumes under Master supply agreement (MSA) with Ambuja cement

Elara Securities says rising Covid-19 cases across India may lead to erratic lockdowns in many parts of the country going ahead, thus, straining demand, which has been strong for the past few months. However, ACC due to its pan-India presence and brand equity should be able to manage these challenges effectively. Therefore, Elara reiterates Accumulate rating and raises CY21E and CY22E earnings 3% and 1% respectively, factoring in past two months’ price hikes. Elara raised the target price to Rs 2000.

ACC Background:

ACC is a leading player in Indian building materials space with a pan-India operating and marketing presence. It has 17 cement plants, 80 RMC (ready mixed concrete) plants, and a wide distribution network of 56000 channel partners.

ACC in its Investors Presentation highlighted that the government’s vision of “Housing for all by 2022” is expected to create lucrative opportunities for ACC. In 2020, around 586.05 lakh tonnes of cement were used at the start of construction work. Demand for affordable homes is set to stay healthy, supported by a growing population, young demographic profile, shift towards nuclear families and rapid urbanization.