Cement Stocks Outlook for the week – 17 to 21.10.2016

Cement Stocks Outlook for the week – 17 to 21.10.2016 )

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Stocks of cement manufacturers are expected to remain under pressure next week due to
the ongoing festival season and unexpected monsoon showers in some regions. However,
stocks are seen rising post Diwali, driven by higher volumes and prices. We believe the
pressure will continue for few more weeks, but post Diwali pick-up in infrastructure spends
from government projects will drive volumes and prices, which will be positive for cement

We expect cement price and volumes to improve from November, and maintains a positive
stance on the sector for the next three years due to improving capacity utilisation, price
realisation, and higher operating margins. Cement companies in north, west, and central
India are expected to benefit the most from the rise in cement prices. In south India, prices
are already high, while east India is facing issues of lower capacity utilisation.
Stocks of UltraTech Cement, among the best performing large-cap cement companies, rose
2.6% in the three sessions of this holiday-truncated week. The stock has given a 52-week
return of around 39% so far.