Cement Stocks Outlook for the week – 04 to 08.07.2016
(Seen range bound as demand to ebb in monsoon)
( www.rupeedesk.in )
The Cement stocks are likely to trade range bound next week, after
having witnessed a strong rally this week tracking the momentum in the broad
market. The Major cement companies' stocks have gained 1.9-17.9% this week. The
onset of the monsoon, however, is likely to keep the positive momentum for shares
of cement companies in check.
The India Meteorological Department has projected the monsoon to
cover the entire country by the first week of July, almost a week ahead of schedule. The weather
bureau has pegged rainfall at 106% of long period average this year. While the monsoon will dampen
cement demand in Jul-Sep, demand is seen bouncing back, particularly in
north-eastern states, due to increased spending by state governments on infrastructure and housing development.
Shares of cement companies are mostly seen subdued this quarter,
but strong Apr-Jun earnings following price hikes in key pockets of north and south India are
seen driving shares. In the medium term, most brokerages are positive on shares of UltraTech Cement
in the large cap space, and JK Lakshmi Cement among medium sized players.
