Choice Institutional Equities Recommends ACC Stock with Target Price of Rs 1810

ACC Faces Earnings Downgrade Amid Higher Input Costs and Soft Demand Growth

Choice Institutional Equities has released a report downgrading its earnings forecast for ACC, a leading cement manufacturer in India. The report suggests a downward revision in earnings per share (EPS) for fiscal year 2027 (FY27E) to approximately 7.2% and FY28E to around 5.6%, citing higher input costs and softer demand growth for FY27E of around 5%.

The report also highlights that the earnings before interest, taxes, depreciation, and amortization (EBITDA) per ton remains below the earlier assumption by approximately INR 100 per ton in FY26. As a result, Choice Institutional Equities has reduced its enterprise value-to-cement equivalent (EV/CE) valuation multiple to 1.6x from the earlier estimate of 1.9x.

Despite the near-term margin headwinds, the report remains constructive on ACC's long-term outlook, citing several positive factors, including the company's strategy to strengthen its presence in the Southern India market, a value-accretive cost reduction plan targeting INR 250 per ton in FY27E, and positive sector tailwinds from a healthy pricing environment.

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Key Projections for ACC

According to the report, ACC is expected to deliver an EBITDA compound annual growth rate (CAGR) of around 15.8% over the period FY26 to FY29E, driven by volume growth and realisation growth.

Choice Institutional Equities has maintained its BUY rating on ACC, with a revised target price of INR 1,810 per share, down from the earlier estimate of INR 2,200 per share.

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