Rahul Gupta CFA, an analyst from Morgan Stanley, maintained the Sell rating on ACC Limited. The associated price target is INR1,670.00.
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Rahul Gupta CFA has given his Sell rating due to a combination of factors impacting ACC Limited’s financial performance. The company’s EBITDA per ton significantly missed estimates, coming in at Rs678 compared to the expected Rs835, indicating weaker profitability than anticipated. Although revenues were higher than expected, driven by a 12% year-over-year increase in cement and clinker volumes, operational costs were notably higher, affecting overall margins.
The rise in raw material, logistics, and other operational expenses exceeded expectations, which overshadowed the benefits of increased volumes. Additionally, the reported profit after tax was Rs3.8 billion, falling short of both Morgan Stanley’s estimate of Rs5.1 billion and the consensus of Rs5.4 billion. These financial challenges, coupled with the need for further clarity from upcoming discussions, have led to a cautious outlook and the Sell rating recommendation.