Recommendation From Cement & Banks Sectors

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations. 

ACC LTD. 

CMP - Rs 1474
BSE CODE 500410
Volume 11,141
Face Value Rs 10
Target Rs 1625
Stoploss Rs 1435 (CLS) 

ACC Ltd. is a cement and ready mix concrete (RMC) manufacturer. The company's cement volume was up 10 per cent YoY, while RMC volume was up 12 per cent YoY in Q3’18. Its capacity utilisation stood at 80 per cent, posting a growth of 73 per cent YoY. The EBITDA stood at Rs 444 crore, up 7 per cent YoY, while PBT stood at Rs 308 crore, up 16 per cent YoY. The PAT rose to Rs 209 crore, up 15 per cent YoY. EPS was reported at Rs 11 per share, posting a growth of 15 per cent YoY. ACC has delivered consistent positive financial performance in the last four quarters. In Q3’18, the company delivered robust growth in value added premium products. Although prices remained under pressure, net sales improved on the back of volume growth. ACC’s energy efficiencies improved as it was able to contain costs owing to continuous fuel source mix optimisation. Since ACC has a downward sloping trendline breakout on the daily scale, we recommend a BUY in this stock. 

FEDERAL BANK

CMP - Rs 83.90
BSE CODE 500469
Volume 558,899
Face Value Rs 2
Target Rs 105
Stoploss Rs 73 (CLS) 

Federal Bank is a private sector commercial bank offering internet banking, mobile banking, online bill payment and fee collection, insurance and mutual fund products, and services including depository, cash management and merchant banking. The company delivered robust growth across all business segments. It posted operating profit growth of 20 per cent YoY in Q2FY19. It also reported the highest ever NII of Rs 1,022 crore. Its advances grew 26 per cent YoY, while personal loans climbed 85 per cent YoY. The CASA growth rate of 23 per cent surpassed deposit growth rate of 22 per cent. NR deposits rose 22 per cent while current account growth was 30 per cent YoY. The balance sheet grew 19 per cent YoY, while the overall business posted a growth of 23 per cent YoY. The market share in advances and deposits was up 11 bps each YoY. With the stock showcasing downward sloping trendline breakout on the weekly scale, we recommend a BUY in this stock.