Geojit’s recommendation to accumulate ACC Ltd. for the target price of Rs. 2325.
ACC Ltd. is a prominent player in the Indian cement industry, boasting an extensive network of 17+ cement plants and 82 ready-mix concrete (RMC) plants. They specialize in manufacturing a wide range of cement and blended cement products.
Impressive Q1FY24 Performance
In Q1FY24, ACC displayed remarkable financial performance. Their revenue witnessed a substantial 16.4% Year-over-Year (YoY) growth, reaching Rs. 5,201 crore. This surge can be attributed to an increase in sales volume, indicating strong demand for their products.
Operational Efficiency and Margin Expansion
What’s particularly noteworthy is the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), which surged by an impressive 80.9% YoY, reaching Rs. 771 crore. This surge is accompanied by a substantial expansion in the EBITDA margin, which grew by 530 basis points to 14.8%. These improvements are attributed to cost reductions and enhanced operational efficiency.
Profit After Tax (PAT) Soars
ACC’s Profit After Tax (PAT) experienced phenomenal growth, surging by a remarkable 105% YoY to Rs. 466 crore. This outstanding performance can be attributed to the company’s improved operational efficiency and higher sales volume.
Positive Outlook for ACC
The positive growth trajectory for ACC is driven by several factors, including a continuous capacity expansion, synergy advantages, and a positive demand trend in the cement industry. These factors collectively contribute to ACC’s strong performance.
Accumulate ACC with Confidence
Considering these robust performance indicators, Geojit has upgraded its rating for ACC to “ACCUMULATE.” They have set a revised target price of Rs. 2,325 based on an estimated adjusted EPS for FY25. This suggests that ACC has the potential for further growth, making it an attractive proposition for investors.
In summary, ACC Ltd. has demonstrated strong financial performance and holds a promising outlook. Accumulating ACC shares could be a prudent investment decision, aligning with Geojit’s recommendation and target price of Rs. 2325.
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