ACC: Avg PE Now Ard 40 Against 20 Of Nifty--Is Such Higher Valuations Justifiable For Cement Cos ?

ACC has to sustain above 1315-1340 zone for any rally towards 1400-1500;

Otherwise, it may fall towards 1200-1180 in the near term.

Any increase in railway goods freight and disappointment in expected higher capex 

in the budget may be negative for the cement cos including ACC

In the current market scenario, 25 may be more reasonable PE for cement cos 

instead of 40 

TTM EPS of ACC : 31.22

Trading idea:

CMP: 1281

Either sell below 1290 or on rise around 1315-1330;

TGT1: 1250-1200-1180*-1140 (1-3M)

TGT2: 1080-1025*-945-911 & 885-850*-810 (12-24M)

TSL> 1345

Note: Consecutive (3 days) closing above 1345 zone, ACC may further rally towards 1380-1400 & 1430-1530 area in the short to long term (alternative bullish case scenario from the present trading level).

To be cont for more analytical inputs----

As par BG metrics & current market scenario:

(based on actual TTM & projected FWD EPS)

Current median valuation of ACC may be around: 1010 (FY:15/TTM)

Projected fair valuations might be around: 930-980-1030 (FY:16-18/FWD)

SCRIP	EPS(TTM)	BV(Act)	P/E(AVG)	Low	High	Median	200-DEMA	10-DEMA
ACC	31.22	437.23	25	1029.98	989.83	1009.90	1359.21	1255.29

ACC

26.5

461.3

25

948.93

911.94

930.44

1359.21

1255.29

ACC

29.25

486.85

25

996.96

958.09

977.52

1359.21

1255.29

ACC

32.25

513.55

25

1046.83

1006.02

1026.43

1359.21

1255.29

Analytical Charts: