Choice Institutional Equities has maintained its buy rating on ACC with a revised target price of ₹2,200, down from the earlier target of ₹2,475. According to the brokerage's research report dated January 31, 2026, the revised target incorporates the amalgamation with ACEM and announced share swap. The recommendation reflects continued confidence in the cement company's strategic positioning and operational improvements.
The brokerage identifies several key factors supporting its positive outlook on ACC. As reported by Choice Institutional Equities, these include group synergy benefits from amalgamation, strategy around strengthening presence in the Southern India market, and a value-accretive cost-reduction plan targeting ₹500/t cost reduction towards FY28E end under the initiative Parvat. The company also benefits from positive sector tailwinds with expectations of cement industry growth of 7-8% in FY26E with healthy pricing environment.
Choice Institutional Equities forecasts ACC's EBITDA to expand at a CAGR of 14.5% over FY25–28E, supported by volume growth assumptions of 10.0%/6.0%/6.0% and realisation growth of 4.0%/0.5%/0.5% in FY26E/FY27E/FY28E respectively. According to the brokerage's analysis, the company's EBITDA growth is expected to be driven by operational improvements and market expansion strategies.
The brokerage employs a robust EV to CE (Enterprise Value to Capital Employed) based valuation framework for ACC. As reported by Choice Institutional Equities, they assign an EV/CE multiple of 2.0x for FY27E/28E and perform sanity checks using implied EV/EBITDA, P/BV and P/E multiples. On the target price of ₹2,200, the FY28E implied multiples are 10.2x/1.8x/15.2x for EV/EBITDA/PB/PE respectively.
