Buy ACC, target price Rs 2100: Motilal Oswal

Motilal Oswal has buy call on ACC with a target price of Rs 2100. The current market price of ACC is Rs 1779.8.
ACC Ltd., incorporated in the year 1936, is a Large Cap company (having a market cap of Rs 33428.95 Crore) operating in Cement sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 4208.75 Crore, up 17.47 % from last quarter Total Income of Rs 3582.82 Crore and up 2.21 % from last year same quarter Total Income of Rs 4117.85 Crore. Company reported net profit after tax of Rs 468.55 Crore in latest quarter.


Investment Rationale
ACC trades at a 35–60% valuation discount to peers Shree, UltraTech, and Ramco. It believes such a large discount is excessive as: (a) ACC has arrested its market share losses since CY17, (b) cost is expected to stay under control, aided by savings in logistic costs, and (c) with planned expansions, the proportion of inefficient assets would decline, improving profitability.

Promoter/FII Holdings
Promoters held 54.5 per cent stake in the company as of Dec 30, 2020, while FIIs held 11.7 per cent, DIIs 20.7 per cent and public and others 13.1 per cent.