ACC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 3.8

📊 Core Financials

• Revenue & Profitability: PAT surged from 384 Cr. to 1,112 Cr. (Qtr Var +376%), showing strong earnings momentum.
• Margins: ROE at 13.4% and ROCE at 17.6% indicate healthy efficiency, though not industry-leading.
• Debt: Debt-to-equity ratio of 0.02 reflects a virtually debt-free balance sheet.
• Cash Flow: Dividend yield of 0.43% is modest, with reinvestment supporting growth.

💹 Valuation Indicators

• P/E Ratio: 10.2 vs Industry PE of 33.2 — significantly undervalued.
• P/B Ratio: Current Price 1,753 ₹ vs Book Value 1,046 ₹ → ~1.67x, reasonable.
• PEG Ratio: 1.50, suggesting valuation is aligned with earnings growth.
• Intrinsic Value: Current price appears attractive relative to fundamentals, offering value opportunity.

🏢 Business Model & Competitive Advantage

• ACC operates in cement and building materials, a critical sector for infrastructure and housing demand in India.
• Competitive advantage lies in strong brand recognition, wide distribution network, and operational efficiency.
• Healthy balance sheet and improving profitability support long-term sustainability.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive near 1,700–1,750 ₹ range, close to support levels and below DMA 50 & DMA 200.
• Long-Term Holding: Strong fundamentals and undervaluation make ACC suitable for long-term accumulation.

✅ Positive

• Low debt-to-equity ratio (0.02).
• Strong quarterly PAT growth (+376%).
• Undervalued compared to industry peers (P/E 10.2 vs 33.2).

⚠️ Limitation

• Dividend yield (0.43%) is modest, limiting income appeal.
• ROE (13.4%) and ROCE (17.6%) are healthy but not exceptional.
• Stock trading below DMA 50 & DMA 200, showing weak technical momentum.

📉 Company Negative News

• DII holding reduced by -1.58%, showing decline in domestic institutional confidence.
• RSI at 30.6 indicates oversold conditions, reflecting weak sentiment.

📈 Company Positive News

• FII holdings increased (+0.38%), showing foreign investor interest.
• Quarterly PAT growth highlights strong operational performance.

🌐 Industry

• Industry PE at 33.2, much higher than ACC’s valuation, indicating sector optimism.
• Cement industry benefits from infrastructure growth, housing demand, and government spending on construction projects.

🔎 Conclusion

• ACC is fundamentally strong with undervaluation compared to industry peers.
• Low debt and strong profit growth make it attractive for long-term investors.
• Best suited for accumulation near 1,700–1,750 ₹ levels.
• Long-term holding recommended, with potential upside as industry demand strengthens.