ACC share price at week’s low after Q4 results; here’s what brokerages say

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Published: April 24, 2019 3:30:49 PM

The shares of India’s cement maker ACC Ltd touched week’s low at Rs 1575.80 by falling 5% on India’s leading exchange BSE, after it announced a substantial increase in its consolidated  earnings for Jan-Mar on Tuesday.

Asian shares near 8-month highs, eyes on US-China talksACC shares touch week?s low after Jan-Mar results. 

The shares of India’s cement maker ACC Ltd touched week’s low at Rs 1575.80 by falling 5% on India’s leading exchange BSE, after it announced a substantial increase in its consolidated  earnings for Jan-Mar on Tuesday.

The Mumbai-based cement maker ACC reported 38.46% increase in its consolidated profits for the first quarter at Rs 346.02 crore on the back of robust sales. Last year, the company had posted a consolidated profit of Rs 250.39 crore in the same quarter, as per its exchange filing.

ACC’s total income during the period of Jan-Mar was up 10.99 percent to Rs 4,075.71 crore as compared with Rs 3,671.95 crore in the corresponding period of the last fiscal.

Despite, the increase in earnings, the brokerages aren’t very impressed with the results as they had expected better numbers. According to them, the company reported subdued operating performance in Jan-Mar on account of lower-than-expected improvement in realisation and increase in power and freight cost.

The brokerage firm Reliance Securities has maintained a buy call on ACC as it thinks the company’s operational performance should improve owing to recent improvement in realisation across regions including Eastern and Northern regions. It has revised its target price with a target Rs 1,720 from the earlier price of Rs 1,840.

ACC’s total income during the period under review was up 10.99 per cent to Rs 4,075.71 crore as against Rs 3,671.95 crore in the corresponding period of the previous fiscal.

Another brokerage firm Prabhudas Lilladher has also maintained a buy call on ACC’s stock with target price of Rs 1,735.

“While the profitability is under pressure for the sector due to intense competition, unabated capacity addition and weakness in high margin Trade segment, cement prices continue to remain firm in ACC’s key markets of Central UP, MP, Jharkhand, Odisha, etc thereby fetching higher realisations. Hence, we maintain our earnings estimates for CY20e/CY21e,” said Prabhuds Lilladher in a report.

Motilal Oswal Securities has also maintained a buy position on ACC with a target price of Rs 1,913. It said that the company missed the margins on account of higher than expected cost.

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