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Cement: ACC (ACC.BO, Sell, on our Conviction List)
• Industry lagging volume growth coupled with exposure to weak markets of North & South India will lead to erosion in margins and ROE in
CY2010 – we expect 500 bp erosion in margins for CY2010
• ACC is trading at 133% CY10 EV/RC, higher than its mid-cycle valuation of 100% EV/RC. The stock is currently trading at 2.8X CY10E P/B –
at more than a 21% premium to the Indian sector average of 2.3X 2010E P/B
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