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Cement Stocks Outlook for the week – 23 to 27.01.2017

Cement Stocks Outlook for the week – 23 to 27.01.2017


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Cement Stocks Outlook for the week – 23 to 27.01.2017
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Stocks of cement companies are likely to be range-bound next week as investors await their earnings for Oct-Dec, and the Union Budget on Feb 1. Cement stocks are seen sideways to positive with no major movements expected. Sales of cement companies suffered a blow after the government's decision to withdraw high value currency notes of 500- and 1,000-rupees on Nov 8. Dealers across the country were forced to undertake a price cut of 10-15% to clear their inventories. Although demand for cement has improved slightly in some parts of the country in January, there are concerns about rising prices of coal and petroleum coke, which are used to produce cement. There is uncertainty about how cement companies absorb the increase in prices. Though some of the estimates of hit on cement demand were overstretched, the market will wait for the cement companies to come out with their earnings for Oct-Dec and it will prove to be the next trigger. UltraTech Cement Ltd will be the first major cement company to detail its earnings for the quarter ended December on Saturday. Analysts also believe that the market will have an eye on the upcoming Budget and it will decide the future trend for the cement stocks. The Competition Commission of India's order on Thursday to impose a total fine of 2.06 bln rupees on seven cement companies--ACC Ltd, Ambuja Cements Ltd, UltraTech Cement, Jaiprakash Associates Ltd, JK Cement Ltd, JK Lakshmi Cement Ltd and Shree Cement Ltd--is not seen having any major impact on cement stocks next week. The market has discounted the effect of the order and it wouldn't cause any major changes in the stock.