Reduce ACC, target of Rs 422: IIFL (Source: Moneycontrol.com)

IIFL has maintained its reduce rating on ACC with a target price of Rs 422 in its February 6, 2009 research report. "ACC’s 4QCY08 PAT (standalone) increased 19% YoY to Rs 3 billion, better than our expectation of Rs 2.6 billion. Adjusted for a sharp increase in other income and a charge for change in discounting rate for present-value employee benefit liabilities, PAT is marginally higher than our expectation."
"We continue to be cautious on ACC, as material growth in volumes is likely only after 3QCY09 (after the new plants have started production). Given that further efficiency gains are unlikely and the company’s dependence on imported coal and openmarket coal purchases is already low, ACC’s cost savings from falling coal prices would be low, compared to peers. ACC continues to be expensive, at P/BV of 1.9x on CY09ii. We maintain our REDUCE rating with a target price of Rs 422," says IIFL's research report.