Sell ACC Ltd. with a target of Rs 1300 – CLSA

CLSA has downgraded ACC Ltd from underperform to sell with a target price of Rs 1300 . The current market price of ACC Ltd. is Rs 1482.2 . Time period given by analyst is year when ACC Ltd. price can reach defined target.
CLSA says ACC didn't fail to disappoint; reported continued market-share losses, uptrend in unit costs. Unit EBITDA compressed to an eight-quarter low of Rs 351/t. ACC's low unit profitability is key advantage in upcycle driving strong earnings growth Remain cautious on near-term pricing outlook, Rising cost is an area of concern.
Current valuations rich at 38x one-year earnings. Merger with Ambuja may help on cost optimisation; CLSA believes time is right to explore the stock.