ACC Ltd is Rated Hold by MarketsMOJO

Understanding the Current Rating

The 'Hold' rating assigned to ACC Ltd indicates a balanced outlook where the stock is neither strongly recommended for purchase nor advised for sale. This rating suggests that investors should maintain their existing positions while closely monitoring the company’s performance and market conditions. The rating reflects a combination of factors including the company’s quality, valuation, financial trends, and technical signals, each contributing to the overall assessment.

Quality Assessment

As of 28 December 2025, ACC Ltd demonstrates a solid quality profile. The company holds a good quality grade, supported by its robust operational metrics and prudent financial management. Notably, ACC maintains an average Debt to Equity ratio of zero, indicating a debt-free balance sheet which reduces financial risk and enhances stability. This conservative capital structure is a positive attribute in the capital-intensive cement sector.

Moreover, the company’s recent half-year performance highlights strong profitability, with a Profit After Tax (PAT) of ₹1,494.61 crores, reflecting a remarkable growth rate of 155.94%. Net sales for the same period stood at ₹12,018.90 crores, up 22.22%, signalling healthy demand and operational efficiency. The Return on Capital Employed (ROCE) at 17.88% and Return on Equity (ROE) at 16.2% further underscore the company’s ability to generate attractive returns on invested capital.

Valuation Perspective

From a valuation standpoint, ACC Ltd is currently rated as very attractive. The stock trades at a Price to Book (P/B) ratio of approximately 1.6, which is below the historical average of its peer group, indicating a discount relative to its intrinsic value. This valuation is particularly compelling given the company’s strong profitability metrics and growth prospects.

Despite the stock’s underperformance in terms of price returns—showing a 1-year return of -17.20% and a year-to-date decline of -15.53% as of 28 December 2025—the company’s earnings growth tells a different story. Profits have surged by 75.6% over the past year, resulting in a very low Price/Earnings to Growth (PEG) ratio of 0.1, which suggests that the stock may be undervalued relative to its earnings growth potential.

Financial Trend Analysis

The financial trend for ACC Ltd remains positive. The company’s recent half-year results demonstrate strong sales growth and profitability expansion, which are key indicators of operational momentum. The ROCE of 17.88% is among the highest in the sector, reflecting efficient capital utilisation. Additionally, the company’s zero debt position enhances its financial flexibility, allowing it to navigate market fluctuations with greater resilience.

Institutional investors hold a significant stake of 27.75%, signalling confidence from knowledgeable market participants who typically conduct thorough fundamental analysis before committing capital. This institutional backing can provide stability to the stock price and support long-term value creation.

Technical Outlook

On the technical front, ACC Ltd currently exhibits a bearish trend. The stock has experienced price declines over multiple time frames, including a 7.98% drop over the past month and a 4.88% decline over the last three months. The short-term technical weakness suggests caution for traders looking for momentum-based entry points.

However, the technical grade should be viewed in the context of the company’s strong fundamentals and attractive valuation. For long-term investors, the current technical softness may present an opportunity to accumulate shares at a discount, provided the company’s operational performance continues to improve.

Performance Relative to Benchmarks

ACC Ltd has underperformed the broader market benchmark BSE500 consistently over the past three years. This underperformance is reflected in the stock’s negative returns over the last year and year-to-date periods. While this trend may concern some investors, it is important to note that the company’s earnings growth and financial health remain robust, which could support a potential recovery in stock price performance over time.

What This Rating Means for Investors

The 'Hold' rating on ACC Ltd advises investors to maintain their current holdings rather than initiating new positions or exiting existing ones. This recommendation reflects a balanced view that the stock is fairly valued given its current fundamentals and market conditions. Investors should consider the company’s strong earnings growth and attractive valuation as positive factors, while also recognising the technical weakness and recent price underperformance as cautionary signals.

For those with a long-term investment horizon, ACC Ltd’s solid financial health, zero debt, and improving profitability metrics may offer a foundation for future appreciation. Conversely, short-term traders may want to wait for clearer technical signals before increasing exposure.

Overall, the 'Hold' rating encourages a measured approach, emphasising the importance of ongoing monitoring of the company’s financial results, sector dynamics, and broader market trends.

Summary

In summary, ACC Ltd’s current 'Hold' rating by MarketsMOJO, updated on 01 Oct 2025, is supported by a combination of good quality fundamentals, very attractive valuation, positive financial trends, and a cautious technical outlook. As of 28 December 2025, the company’s strong earnings growth and debt-free balance sheet provide a solid base, while the stock’s recent price weakness and bearish technical signals counsel prudence. Investors should weigh these factors carefully when considering their portfolio strategy.

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