ACC - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.2
| Stock Code | ACC | Market Cap | 31,717 Cr. | Current Price | 1,690 ₹ | High / Low | 2,123 ₹ |
| Stock P/E | 12.5 | Book Value | 1,046 ₹ | Dividend Yield | 0.44 % | ROCE | 17.6 % |
| ROE | 13.4 % | Face Value | 10.0 ₹ | DMA 50 | 1,738 ₹ | DMA 200 | 1,853 ₹ |
| Chg in FII Hold | 0.95 % | Chg in DII Hold | -1.18 % | PAT Qtr | 404 Cr. | PAT Prev Qtr | 1,112 Cr. |
| RSI | 47.4 | MACD | -26.3 | Volume | 1,13,842 | Avg Vol 1Wk | 2,08,720 |
| Low price | 1,593 ₹ | High price | 2,123 ₹ | PEG Ratio | 1.84 | Debt to equity | 0.02 |
| 52w Index | 18.3 % | Qtr Profit Var | -62.9 % | EPS | 148 ₹ | Industry PE | 30.8 |
📊 ACC trades at a reasonable valuation (P/E 12.5 vs industry 30.8), making it relatively undervalued compared to peers. The company has strong fundamentals with ROCE (17.6%) and ROE (13.4%), supported by a low debt-to-equity ratio (0.02). However, earnings have shown volatility, with quarterly profit dropping sharply (-62.9%). Dividend yield is modest at 0.44%, and PEG ratio of 1.84 suggests valuations are fair but not deeply attractive. Technical indicators (RSI 47.4, MACD negative) show neutral to weak momentum, with the stock trading below its 200 DMA (1,853 ₹).
💡 Ideal Entry Price Zone: 1,600 ₹ – 1,700 ₹, closer to long-term support levels and valuation comfort. Current price (1,690 ₹) is within this zone, offering a fair entry point.
📌 Exit Strategy / Holding Period: If already holding, maintain a medium to long-term horizon (2–4 years) as valuations are attractive relative to peers. Exit or partial profit booking can be considered near 2,100–2,150 ₹ resistance levels. Long-term investors should hold if expecting recovery in earnings and sustained demand in the cement sector.
Positive
- Attractive valuation (P/E 12.5 vs industry 30.8).
- Strong ROCE (17.6%) and ROE (13.4%) indicate efficient capital usage.
- Low debt-to-equity ratio (0.02) ensures financial stability.
- FII holdings increased (+0.95%), showing foreign investor confidence.
Limitation
- Quarterly profit dropped significantly (-62.9%).
- Dividend yield is modest at 0.44%.
- Stock trading below 200 DMA indicates weak momentum.
- MACD negative (-26.3) suggests bearish trend in short term.
Company Negative News
- Sharp decline in quarterly PAT (404 Cr. vs 1,112 Cr.).
- DII holdings decreased (-1.18%), showing reduced domestic institutional support.
Company Positive News
- FII holdings increased (+0.95%), indicating foreign investor confidence.
- Stable long-term fundamentals with strong book value (1,046 ₹).
Industry
- Industry P/E is 30.8, highlighting ACC’s undervaluation.
- Cement sector has cyclical demand but long-term growth potential driven by infrastructure development in India.
Conclusion
✅ ACC is undervalued compared to industry peers and offers a fair entry point around 1,600–1,700 ₹. While fundamentals are strong, earnings volatility and weak momentum limit short-term upside. Long-term investors can hold for 2–4 years, with partial profit booking near 2,100–2,150 ₹ resistance, as sectoral demand recovery could support growth.