ACC Cement: Earnings Report Sparks Mixed Broker Reactions

ACC, a prominent player in the cement industry, has recently garnered attention following its latest earnings report. While some brokerages have opted to adjust their target prices downward, others maintain a bullish outlook on the stock. Notably, ACC’s shares have seen a nearly 10% decline over the past week. Below, we explore key brokerage opinions to assist in your investment decision—whether to Buy, Sell, or Hold.

Nuvama Institutional Equities: Positive Outlook for ACC

Nuvama Institutional Equities has reaffirmed its ‘Buy’ recommendation for ACC, albeit with a slight reduction in the target price, now set at Rs 2,381, down from Rs 2,462.

• Volume Growth: The company’s Q4FY25 sales volume surged 14% year-over-year and improved 11% quarter-over-quarter.
• Earnings Boost: Increased demand and favorable pricing led to a 2% rise in realization in the last quarter, allowing EBITDA to exceed Nuvama’s estimates by 7%.

“Overall, EBITDA per ton was Rs 673, which shows a decline of approximately 16% year-over-year but a substantial increase of 52% quarter-over-quarter compared to Rs 442 in Q3FY25 and Rs 805 in Q4FY24. Premium product volumes experienced a 7% rise, accounting for 41% of trade share,” Nuvama reported.

On the expansion front, the launch of two new grinding units in Sindri and Salai Banwa has been delayed and is expected to start operations in Q1FY26 or Q2FY26. The company has invested Rs 690 crore in acquiring land near the Chanda plant, aimed at establishing a grinding unit, limestone blocks, and coal mines.

JM Financial’s Take on ACC

JM Financial has made adjustments to its earnings forecasts, citing potential upward pricing trends that could be countered by margin pressures from increased volumes under Master Supply Agreements (MSAs).

• Revised Estimates: The brokerage has lowered its EBITDA projections by 3% for FY26-FY27 and reduced the target price for March FY26 to Rs 2,150, down from Rs 2,250.
• Valuation Insights: Despite the downgrade, JM Financial maintains a ‘Buy’ rating, highlighting that the current valuation remains attractive. However, they have shown a preference for Ambuja Cements within the group due to its enhanced growth prospects.

ACC’s Q4 Financial Performance

ACC’s recent financial performance revealed a 20.4% decline in consolidated net profit for Q4FY25, totaling Rs 751.03 crore, compared to Rs 943.4 crore in the same quarter last year. On a sequential basis, there was a notable 31.2% drop in net profit.

• Revenue Growth: The company reported a 12.7% increase in revenue from operations, reaching Rs 5,991.67 crore, up from Rs 5,316.75 crore in the same quarter last year.

For those interested in expanding their portfolio, it may be worth investigating other cement stocks alongside ACC.

About ACC

ACC operates as a subsidiary of Ambuja Cements, which was acquired by the Adani Group from Holcim in 2022. The company is currently chaired by Karan Adani, reflecting a strategic focus on growth and expansion in the competitive cement market.

As ACC navigates these financial waters, investors should weigh expert opinions carefully, considering both short-term challenges and long-term opportunities in the cement sector.