ACC (ACC)

FairStock Score: 70/100 — STEADY

Score breakdown: P/E: 3/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Debt-to-equity of 0.02 and positive FCF of ₹449 Cr indicate a fortress balance sheet.
• ROCE of 17.44% and ROE of 14.28% show efficient capital use for a cement player.
• P/E of 11.88, P/B of 1.44, and Graham Number of ₹1,771 provide moderate valuation cushion.
• Promoter holding of 56.69% aligns management with minority investors.
• 5-year revenue CAGR of 9.56% plus latest quarterly sales of ₹6,483 Cr show steady demand.

Concerns

• Sales growth of 16.38% but profit growth of only 2.14% signals margin compression.
• DCF intrinsic value of ₹10.67 is drastically below market price, raising a valuation red flag.
• Low dividend yield of 0.47% offers limited downside support.
• Negative EV/EBITDA of -21.62 complicates conventional valuation and needs scrutiny.

AI Analysis

At ₹1,423.65, ACC is a cement company I can understand. The first thing I look for is a balance sheet that lets a business survive a bad cement cycle. Here, debt-to-equity is just 0.02 and free cash flow is ₹449 crore. That gives me comfort. Promoter holding at 56.69% also aligns the company with public shareholders. The returns are respectable: ROCE of 17.44% and ROE of 14.28%. These are not mouth-watering numbers, but they are stable enough for a commodity player. The valuation appears fair at first glance. A P/E of 11.88 and P/B of 1.44 are not demanding, and the Graham Number of ₹1,771.13 gives a margin of safety of about 10%. That is thin, not deep. My bigger worry is the growth gap: sales are up 16.38%, but profit is up just 2.14%. This tells me pricing power is weak and costs are eating into margins. A five-year revenue CAGR of 9.56% confirms this is a slow, steady business, not a fast grower. The negative EV/EBITDA of -21.62 is an accounting oddity; with almost zero debt, it likely reflects a large cash balance rather than distress. But the supplied DCF intrinsic value of ₹10.67 sits far below the current price. If I trust that number, this stock is enormously overvalued. I would not rely solely on it, but I cannot ignore that contradiction. The dividend yield of 0.47% offers little income protection. Overall, ACC looks like a financially strong, modestly profitable stalwart with a reasonable P/E but no substantial margin of safety. I would wait for a lower price or evidence that margins are expanding before committing new capital.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer