GOLDEN RULES FOR TRADING

Cement Stocks Outlook for the week – 01 to 05.09.2014

Cement Stocks Outlook for the week – 01 to 05.09.2014

Stocks of major cement companies are seen following the trend in the broader market
during the week in the absence of sector-specific triggers. The bias is seen positive on
general optimism over demand.

Stock indices are seen trading firm next week after they ended at record closing levels on
Thursday.

We don't expect much movement in cement stocks in the week ahead. The mood is
festive, in general and that should reflect in the broader market.

Cement stocks have sharply outperformed the market over the past six months as midcaps
rallied on strong earnings and compelling valuations.
We expect strong volume and price momentum over the next 2-3 years as infrastructure
activity picks up under the new government, taking the sector deeper into a structural
upcycle.

We forecast a demand compounded annual growth rate of 9-10% over FY14-FY17, which will support strong pricing (7-8% CAGR) and profitability.