Add ACC, target price Rs 2574: Centrum Broking

Centrum Broking has add call on ACC with a target price of Rs 2574. The current market price of ACC Ltd. is Rs 2219.7.
ACC Ltd., incorporated in the year 1936, is a Large Cap company (having a market cap of Rs 41674.69 Crore) operating in Cement sector.

ACC Ltd. key Products/Revenue Segments include Cement, Ready Mix Concrete, Other Operating Revenue, Scrap for the year ending 31-Dec-2021.



Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 4057.08 Crore, down -10.29 % from last quarter Total Income of Rs 4522.28 Crore and up 6.42 % from last year same quarter Total Income of Rs 3812.31 Crore. Company reported net profit after tax of Rs -90.25 Crore in latest quarter.

Investment Rationale
The higher cost of coal inventory and weak demand amid monsoon lead to sharp fall in profitability during the quarter. It believes, lower coal/petcoke price, higher volumes and realisation/t would drive margins back higher in coming quarters. Further, new capacity commissioning provides higher volume The overall capacity expansion is on track and increase capacity to 39.3mtpa by FY25. Post-acquisition of ACC and Ambuja Cement by Adani Group, the promoters to gain market and consolidate market position is evaluating various inorganic acquisition opportunities which will further add to earning visibility.

Promoter/FII Holdings
Promoters held 54.53 per cent stake in the company as of 30-Jun-2022, while FIIs owned 22.63 per cent, DIIs 10.15 per cent.