Neutral ACC; target of Rs 1170: Motilal Oswal

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • ACC's 2QFY27 revenue/EBITDA declined 5%/54% YoY, with operating performance impacted by geopolitical uncertainties, monsoon conditions, and elevated energy costs.
  • The company is focused on improving operational efficiencies, premiumization, and logistics optimization to mitigate cost pressures. Green power share rose to 34%, and premium products contributed 47% of sales.
  • ACC added 3.4mtpa of cement capacity in 2QFY27, with a medium-term demand outlook supported by infrastructure spending, urbanization, and rural housing.

Thesis Validation Checklist

  • Over the next 12 months, watch for signs of improvement in operational efficiencies, premiumization, and logistics optimization.
  • Monitor the company's ability to mitigate cost pressures and improve profitability.
  • Track the progress of the proposed merger with ACEM and its impact on the company's operations and financials.