Maintain 'reduce' on ACC - TP Rs.999 - Geojit BNP Paribas Financial Services

- 2QCY12 results surprised positively with EBITDA of Rs.690 crore and recurring PAT of Rs.420 crore.

- Average sales price (ASP) of Rs.4591/ton increased 8% qoq and 13% yoy and looks better than ASP of peers.

- Operating cost at Rs.3516/ton is higher than market estimate and EBITDA/ton at Rs.1138 is 13% better than analysts' estimates.

- At the current price of Rs.1260 range, it seems that the stock is overvalued and it is traded at 35% premium to its five year average price.

- 3QCY12 is likely to see a decline in ASP and EBITDA /ton and EBITDA/ton expansion for ACC and the sector is unlikely in CY12 with deficit monsoon, continuing oversupply situation, cost inflation and ongoing regulatory overhang.

Source : Equity Bulls

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