Q4 FY26 Results: Profit Plunges 68% Despite Record Revenue

ACC's fiscal fourth-quarter 2026 results, reported April 30, 2026, revealed a sharp 68.28% year-on-year drop in consolidated net profit to INR 238.25 crore, down from INR 751.04 crore. This profit decline came despite record quarterly revenue of INR 7,146.18 crore, up 16.87%, fueled by premium products and record sales volumes of 11.9 million tonnes. The main driver of profit erosion was a significant contraction in operating margins, which fell to 8.8% from 13.6% a year prior. EBITDA declined 24.45% year-on-year to INR 627 crore. ACC shares, trading around INR 1,411.10 on May 4, 2026, are below Motilal Oswal's INR 1,310 target, signaling investor concern about the company's ability to convert sales growth into shareholder value. The current TTM P/E ratio is approximately 12.53x, considerably lower than industry peers.

Valuation Gap: ACC Lags Peers Amid Sector Growth

ACC's stock valuation has significantly lagged its industry peers. While ACC's TTM P/E ratio is about 12.53x, competitors such as UltraTech Cement trade at multiples of 40.8x to 46.08x, and Shree Cement between 41.32x and 51.93x. Dalmia Bharat's P/E is closer, around 30.91x to 31.68x. Motilal Oswal's valuation of 6.0x FY28E EV/EBITDA also appears conservative. This discount reflects ACC's ongoing profitability challenges, which contrast sharply with the positive outlook for the broader Indian cement sector. The sector is forecast to grow 7-8% in FY27, supported by infrastructure investments, including a record INR 12.2 trillion infrastructure outlay in the Union Budget 2026-27, and sustained housing demand. However, rising input costs, such as petcoke and coal prices, partly due to geopolitical tensions in West Asia, are squeezing margins across the industry. ACC's share price has mirrored these pressures, falling about 24% in the past year and hovering near its 52-week low.

Why ACC Faces Pressure: Persistent Margin Woes

ACC's primary challenge is the persistent erosion of its profit margins, even while achieving record revenues and benefiting from overall sector demand. Despite management's focus on premium products, the sharp drop in operating margins to 8.8% and the lowest EBITDA in eight quarters suggest deeper structural cost issues are not being fully addressed. Forecasts for softer demand growth of 5% in FY27, potentially impacted by a weak monsoon, add risk. Earnings may struggle to recover strongly, especially with ongoing cost pressures from fuel, packaging, and currency fluctuations expected to persist through the first half of FY27. ACC's profitability seems more susceptible to these pressures compared to some peers who might have better pricing power or cost controls. The significant gap between Motilal Oswal's 'Neutral' rating and INR 1,310 price target, versus the general market consensus of 'Buy' with targets around INR 1,900-2,000, highlights skepticism about ACC's capacity to leverage sector strengths. This could indicate a potential value trap if operational fixes are not implemented quickly.

Looking Ahead: Demand Forecasts and Analyst Views

For fiscal year 2027, management expects demand growth to stay modest at approximately 5%. Motilal Oswal projects ACC's EBITDA per tonne to reach INR 617 in FY27 and INR 695 in FY28, a slight increase from INR 614 in FY26. The brokerage maintains its 'Neutral' recommendation, setting a price target of INR 1,310 based on a 6.0x multiple of FY28E EV/EBITDA. This target is significantly lower than the average 12-month price targets from other analysts, which range from INR 1,865 to INR 2,004 and suggest potential upside of over 30%. Ultimately, ACC's short-term prospects depend on its ability to manage rising input costs, stabilize profit margins, and translate its revenue growth into profit recovery by capitalizing on long-term infrastructure expansion trends.