Financial results for the financial quarter and year ending March’24 are on the roll, and along with the same, various Brokerage houses are coming up with aggressive stock price targets based on the company’s expectations for future financial performance and other guidance provided.
Listed below is one fundamentally strong stock present under Adani Group’s portfolio that one could add to their watchlist for a potential upside of more than 30 percent:
ACC Limited
With a market capitalization of Rs 47,534.59 crores, the stocks of ACC Limited, India’s first Cement company principally engaged in the business of manufacturing and selling cement and ready-mix concrete, ended their trading session on Tuesday at Rs 2,531.30, gaining 0.20 percent compared to the previous close of Rs 2,526.15 apiece.
ICICI Securities, one of the well-known Domestic Brokerages based in India, gave a ‘Buy’ call on the stocks of ACC Limited and gave a target price of Rs 3,272, exhibiting a potential upside of approximately 30 percent.
The investment rationale for providing such a recommendation pertains to a bunch of key factors including the company’s effective cost efficiencies, robust capacity additions, healthy return on equity (RoE) numbers, and many more.
Having a glance at the financials, the company’s prime business indicators, viz, its operating revenues as well as after-tax profits, reported a drastic jump in numbers with the former rising from Rs 4,914 crores during Q3FY24 to Rs 5,409 crores during Q4FY24, and the latter, keeping the timeframe the same, rose drastically from Rs 538 crores to Rs 945 crores.
Moreover, the company’s ratio analysis portrays decent gross profit margins, increasing drastically from 3.91 percent during FY23 to 11.64 percent during FY24.
In addition to the above metrics, the company’s return ratios, viz, the return on equity (RoE) as well as the return on capital employed (RoCE), reported a jump in numbers with the former increasing from 6.26 percent during FY23 to 14.30 percent during FY24, and the latter, keeping the timeframe the same, rose from 9.56 percent to 15.45 percent.
According to the latest presentations, the Indian Cement industry accounts for approximately 23 percent of the Building Material industry. The company targets its market share to be ‘20’ percent by FY2028 from the current share of 14 percent.
The company is also expected to have an accelerated growth rate of 16 percent to reach ‘140’ Metric Tonnes Per Annum (MTPA) by 2028.
Incorporated in 1936, ACC Limited is an Adani Group company providing a wide series of cement products including ordinary Portland cement, composite cement, bulk cement, and ready mixed concrete value-added products.
Written by Amit Madnani
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