ACC downgraded to 'Sell' by MarketsMOJO due to poor long-term growth and bearish trends

ACC, a leading cement company in the largecap industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 22, 2024. This decision was based on poor long-term growth, with net sales and operating profit only growing at an annual rate of 5.28% and 4.54% respectively over the last 5 years.

In addition, the company's results for June 2024 have been flat, with a significant decrease in PAT(Q) at Rs 361.36 crore, falling by -31.4%, and PBT LESS OI(Q) at Rs 414.56 crore, falling by -18.6%. The DPR(Y) has also hit its lowest point at 6.03%. These factors have contributed to the stock being in a bearish range, with technical indicators such as MACD, Bollinger Band, and KST all showing bearish trends.

Furthermore, ACC has underperformed the market in the last 1 year, with a return of only 14.47%, compared to the market (BSE 500) return of 31.91%. However, the company does have a low Debt to Equity ratio (avg) at 0 times and a ROE of 12.9, making it an attractive valuation with a 2.6 Price to Book Value. The stock is currently trading at a discount compared to its average historical valuations.

Despite its underperformance in the market, ACC's profits have risen by 158.4% in the past year, resulting in a PEG ratio of 0.1. Additionally, the company has a high institutional holding at 30.09%, indicating that these investors have better capabilities and resources to analyze the fundamentals of companies compared to most retail investors.

In conclusion, while ACC may have some attractive valuation factors, the recent downgrade to 'Sell' by MarketsMOJO and its underperformance in the market may be cause for concern for potential investors. It is important to carefully consider all factors before making any investment decisions.