homemarket NewsACC gains 5% on robust earnings; brokerages expect more upside

ACC gains 5% on robust earnings; brokerages expect more upside

ACC gains 5% on robust earnings; brokerages expect more upside
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By Pranati Deva  Jul 19, 2019 9:40:40 AM IST (Published)

Shares of ACC gained 5 percent on Friday after the cement maker posted a 38.61 percent rise in consolidated net profit at Rs 455.68 crore for the June-quarter on account of improvement in operating performance and sales.

Shares of ACC gained 5 percent on Friday after the cement maker posted a 38.61 percent rise in consolidated net profit at Rs 455.68 crore for the June-quarter on account of improvement in operating performance and sales. ACC shares gained as much as 5.1 percent to Rs 1,647.30 per share on BSE intraday. At 9:25 AM, the stock was trading 4.6 percent higher at Rs 1,639.35, while the Sensex was up 0.3 percent at 39,018.

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Other cement stocks also rose on the positive outlook for the cement sector. Ultratech Cement was up 1.5 percent, India Cements rose 2 percent, JK Lakshmi Cement also added 2 percent, and Ambuja Cement advanced 1.75 percent.
Total revenue from the operation rose 7.83 percent to Rs 4,149.82 crore as against Rs 3,848.25 crore YoY.
ACC Managing Director & CEO Neeraj Akhoury said that higher annual budget allocation for infrastructure, affordable housing, upgradation of roads and the government's strong focus on connectivity will drive cement demand and aid growth going forward, he added.
Brokerages were also positive on the stock. CLSA was bullish on the stock and increased the stock's price target to Rs 2,050 per share from Rs 2,000 earlier. It raised the earnings per share forecast for the cement maker by 3-4 percent and added that cement pricing will be a key stock price driver and needs to be monitored.
Meanwhile, Nomura said that the June-quarter results of the company were significantly ahead of consensus. However, it expects more price cuts are likely given the weak demand. The realisation will decline over the next 4-5 months, it added but believes that the cement sector is in an upcycle.
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