Neutral ACC; target of Rs 1170: Motilal Oswal

What happened

Motilal Oswal said ACC's 2QFY27 results were in line. Revenue and EBITDA fell about 5% and 54% year on year to INR56.4b and INR3.7b. EBITDA per tonne fell about 51% to INR360. Motilal Oswal reiterated Neutral with a target of Rs 1170.

Confirmed

Global impact / market context

Falling profit per tonne means ACC keeps less cash from each sale, which can limit its ability to fund capital spending or return cash to investors. The reiterated Neutral view and Rs 1170 target suggest the broker sees current weakness as unlikely to reverse quickly.

Analyst inference

The report estimates EBITDA per tonne of INR472 in FY27 and INR582 in FY28, below INR599 in FY26. Weak profitability has driven a significant de-rating, which means investors have lowered the value they place on each rupee of the company's earnings. The target uses 7.0x FY28 estimated EV/EBITDA, a valuation multiple.

Analyst inference

What to watch

1. Motilal Oswal estimates EBITDA per tonne of INR472 in FY27 and INR582 in FY28, compared with INR599 in FY26, so investors can track whether actual profit per tonne moves toward these forecasts. Confirmed
2. Watch ACC's revenue and cost trends because the report shows year-on-year declines in revenue and EBITDA, and weaker profit per sale could keep pressure on the stock's valuation multiple. Analyst inference
3. The analyst's Neutral rating and Rs 1170 target imply limited upside. Investors could watch for a sustained recovery in EBITDA per tonne before treating the de-rating as over. Proposed

Evidence

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