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Positive on ACC, UltraTech and JK Cements: Reliance Securities

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ACC reported an over two-fold jump in consolidated net profit for the second quarter ended June 2021. The stock jumped 6.90 percent to Rs 2,299.05, its 52-week high on the BSE. Binod Modi of Reliance Securities spoke to CNBC-TV18 on ACC Q2CY21 earnings and his take on other cement companies.

ACC reported an over two-fold jump in consolidated net profit for the second quarter ended June 2021. The stock jumped 6.90 percent to Rs 2,299.05, its 52-week high on the BSE.
The cement maker’s profit jumped to Rs 569.45 crore for the quarter ended June 2021, helped by a lower base, increase in sales and cost-efficiency. The company follows January-December financial year.
Binod Modi of Reliance Securities spoke to CNBC-TV18 on ACC Q2CY21 earnings and his take on other cement companies.
ACC has a significant presence in south and east India where prices on a sequential basis have improved by almost 10 percent and 7.50 percent respectively.
“Going forward we believe with steady realisation in place, at the same time we believe that post-monsoon demand scenario also should improve quite a bit. So altogether cement space should continue to deliver better numbers going forward,” said Modi.
On ACC valuation, he said, “ACC still trades at 11.50x of CY23 earnings. So it looks quite attractive compared to other cement companies where valuations have already surpassed their all-time historical average. So definitely ACC has a scope as of now to get valuation re-rating.”
So, which are the cement stocks to watch out for?
“In largecaps, we continue to maintain our positive view on UltraTech Cement. In midcaps, we remain quite positive about companies that are consistently adding capacities and securing their growth prospects. On these lines, we believe Jk Cement is one of our preferred pick, followed by Sagar Cements.”
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