ACC Q2 Results: Brokerages Up Price Targets; Cement Stocks Rally
A laborer carries an ACC cement bag in New Delhi. (Photographer: Prashanth Vishwanathan/Bloomberg)

ACC Q2 Results: Brokerages Up Price Targets; Cement Stocks Rally

Shares of ACC Ltd. gained the most among peers after brokerages raised target prices for the cement maker, citing a better-than-expected second quarter, improved realisations and cost-saving efforts.

That’s despite a 9.5% sequential fall in revenue of the Lafarge Holcim subsidiary at Rs 3,884.8 crore in the April-June period. That compares with the Rs 3,705.3-crore consensus estimate of analysts tracked by Bloomberg. ACC follows January-December fiscal.

  • Net profit down 4.2% at Rs 533.8 crore, surpassing the Rs 453-crore consensus estimate.

  • Ebitda rose 1.8% at Rs 874.7 crore compared with the Rs 726.4-crore estimate.

  • Margin stood at 22.5% versus 20.02%.

Shares of ACC gained as much as 8.9%, compared with a 1.5-8.4% rise in other cement stocks in afternoon trade on Tuesday. Of the 44 analysts tracking ACC, 35 have a ‘buy’ rating, six recommend a ‘hold’ and three suggest a ‘sell’, according to Bloomberg data. After today's rally, the ACC stock is trading near the Bloomberg consensus 12-month target price of Rs 2,311.

Here are key brokerage’s takeaways on ACC’s second-quarter results...


  • Maintains ‘sell’ rating; raises target price to Rs 1,530 from Rs 1,407 apiece.

  • Q2 beat on better realisations, continued cost savings.

  • Ebitda was 20% ahead of consensus driven by raw material cost decline.

  • Ebitda per tonne was the best quarterly print in last 10 years at least.

  • Sharp decline in raw material cost is unsustainable.

  • Bulk of the cost savings driven impact is already through.

  • Expects company to lose capacity market share.

Credit Suisse

  • Maintains ‘neutral’; hikes target price to Rs 2,450 from Rs 2,000 apiece.

  • Strong volume growth in partly impacted quarter, realisations up QoQ.

  • Ebitda increase QoQ driven by higher realization.

  • Ametha expansion and associated grinding unit on track.

  • Near-term weakness may emerge on Covid, commodity pressures.


  • Maintains ‘buy’; raises target price to Rs 2,870 from Rs 2,300 apiece.

  • Volume growth over 40% YoY was 5% ahead of estimates.

  • Blended realisations grew 5-6% YoY and QoQ, and was a bit ahead of estimates, led by south and east markets.

  • Unit Ebitda was the highest in a decade.

Kotak Securities

  • Upgrades to ‘add’ from ‘sell’; hikes target price to Rs 2,300 from Rs 1,950 apiece.

  • Q2 CY21: Ebitda outperformance continues on lower costs.

  • Cost-saving programmes, fuel-mix rationalisation and lower clinker factor are driving sustainable cost efficiencies.

  • Continuous focus on cost-saving initiatives yielding results.

  • Expansion and cost-saving projects provide growth visibility.

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