Buy ACC, target price Rs 2480: Motilal Oswal

Motilal Oswal has buy call on ACC with a target price of Rs 2480. The current market price of ACC Ltd. is Rs 2276.15 Time period given by analyst is one year when ACC Ltd. price can reach defined target.

ACC Ltd., incorporated in the year 1936, is a Large Cap company (having a market cap of Rs 42599.54 Crore) operating in Cement sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 3930.49 Crore, down -9.35 % from last quarter Total Income of Rs 4335.94 Crore and up 48.12 % from last year same quarter Total Income of Rs 2653.52 Crore. Company reported net profit after tax of Rs 566.18 Crore in latest quarter.

Investment Rationale
The brokerage values ACC at 10x June’23 EV/EBITDA (~10% discount to the past five-year average of 11x) to arrive at Target Price of INR2,480; this implies target EV/t of ~USD116 and target P/E of 20x on CY22E.


Promoter/FII Holdings
Promoters held 54.5 per cent stake in the company as of March 31, 2021, while FIIs held 13.7 per cent, DIIs 19.5 per cent and public & others 12.3 per cent.