Expert says BUY ACC shares with target price of Rs 2090, stop-loss of Rs 1920

ACC Share price today is Rs 1954, down Rs 25 or 1.25%.  ACC Share price has moved up from Rs 1922 to Rs 1954 in this week. Sumeet Bagadia, Executive Director of Choice Broking has given a trading strategy on ACC. He said that ACC should be bought in cash at Rs 1990 with stop-loss of Rs 1920 and target of Rs 2090. On the daily timeframe, ACC has been trading on Higher Highs & Higher Lows formation, which indicates continued bullish move in the stock. Hence, Sumeet is recommending a long position in ACC for the target of 2090.

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 56,000 channel partners.

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KRChoksey says that Infrastructure and construction activities have seen a good recovery in Q1CY21 as normalcy started returning to the economy. Pending Bharatmala awarding of around 16,219 km is likely to get completed by 2023. Also, National Infrastructure Pipeline (NIP) envisages around Rs 111 lakh cr investment over 2020-2025 period. All these augur well for ACC, to grow its revenue and profitability going forward.

KEY Highlights from ACC:

1)     Affordable Housing Segment to be a Key Driver for the Cement Sector:

ACC in their 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.

2)     ACC is Expanding Capacities to Capitalise on Opportunities:

With projected increase in cement demand, expansions have been kick started to increase clinker and cement capacities in the attractive markets of East and Central region.

KRChoksey says that with expected capacity addition and steady capacity utilization giving good revenue visibility, they are positive on ACC’s future growth potential. Management is focused on improving ACC’s margin profile by increasing share of premium products in revenue mix augur well for the company. KRChokey maintains Buy rating ACC with target price of Rs 2185.