Shares of cement maker ACC rose by over 5% Friday after the company reported 38.6% rise in net profit and flagged better demand and growth going forward. Cement maker ACC booked 38.61% rise in consolidated net profit at Rs 455.68 crore for the quarter ended June 30, 2019 as against Rs 579.13 crore in the year-ago period, helped by the improvement in operating performance and sales.
The stock price of cement maker ACC opened with a gap up pattern chart at 4.17% rise to Rs 1632.55 against the last closing of Rs 1567.20 on BSE. The cement maker shares jumped 5.11% to day's high of Rs 1,647.55 on NSE and BSE, respectively. It closed 1.51% lower at 1543 level on BSE.
Moreover, the stock has formed a strong bearish bar reversal chart pattern in today's trade. The stock price has moved above 30-day moving average on Friday. However it trades lower than 50, 150 and 200-day moving average price.
"Despite subdued cement demand, our strong customer relationships, loyal channel network and range of innovative products have helped us deliver a robust quarter. Our ready mix concrete business grew strongly aided by eight new ready mix concrete plants in this quarter," ACC Managing Director & CEO Neeraj Akhoury said.
Total revenue from the operation was also up 7.9%, while revenue from operation for the six months was up 7.97%. During the June quarter, cement sales volume was flat, whereas the sales volume of ready mix concrete was up 10.38%.
Commenting on the performance for the quarter," The cement industry witnessed weak off-take in the quarter due to the slow pace of construction activity. Cement realization improved year on year", ACC said.
After ACC's quarterly earnings report, many brokerage firms have upgraded their ratings on the cement maker.
"Driven by attractive valuations, we maintain 'Buy' with a target price of Rs 1,800," report submitted by Prabhudas Lilladher Private Ltd suggested, adding that" Cement sales volume were better than expectations".
Edelweiss Research upgraded ACC stock 'to Buy' from 'Hold' with a target price of Rs 1,846, while quoting, "company looks set to benefit from industry positives of healthy cement prices and benign cost".
Reliance Securities maintained 'Buy' rating on the stock, with a revised Target Price of Rs 1,870 (from Rs 1,840 earlier and added that, "we believe higher realisation in 2QCY19 and moderate price correction till date in the current quarter are likely to augur well for the Company and resultantly, its profitability is expected to remain firm in the ensuing quarters. "
Citi maintained 'Buy' rating on ACC with a target price of Rs 1,750, followed by CLSA, with a target price of Rs 2,050, while Nomura maintained 'Neutral' on the stock with a target price of Rs 1,750.
According to data available with the exchange, there was a surge in volume trade with 2 lakh shares and 56.1 lakh shares changing hands on BSE and NSE, respectively.
Edited by Rupa Burman Roy