Cement Stocks Outlook for the week - 06 to 10.03.2017
Cement Stocks Outlook for the week - 06 to 10.03.2017
The share of cement companies are seen falling next week, as investors say it will take some time for
demand to peak. Cement demand increased last month, but prices haven't even reached the predemonetisation levels of October. This is a long cycle and it will take some time for the price to go above October levels. Demand for cement had taken a hit after the government announced the withdrawal of high-value currency notes from circulation on Nov 8. Dealers across the country were forced to cut cement prices by 10-15% to clear inventories, raising concern about a sharp drop in the profitability of companies in the sector. In the Union Budget for 2017-18 (Apr-Mar), Finance Minister Arun Jaitley had allocated a record 3.96 trln rupees for the infrastructure sector, up 10.5% from 2016-17. He also announced a host of measures for the real estate sector, including according infrastructure status to affordable housing. Budget was positive and it will certainly increase the demand. Remonetisation is already helping, and will further help (in increasing demand). Not to forget, we had a favourable monsoon. Next week, shares of ACC Ltd and Ambuja Cements Ltd are seen negative.
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Cement Stocks Outlook for the week - 06 to 10.03.2017
The share of cement companies are seen falling next week, as investors say it will take some time for
demand to peak. Cement demand increased last month, but prices haven't even reached the predemonetisation levels of October. This is a long cycle and it will take some time for the price to go above October levels. Demand for cement had taken a hit after the government announced the withdrawal of high-value currency notes from circulation on Nov 8. Dealers across the country were forced to cut cement prices by 10-15% to clear inventories, raising concern about a sharp drop in the profitability of companies in the sector. In the Union Budget for 2017-18 (Apr-Mar), Finance Minister Arun Jaitley had allocated a record 3.96 trln rupees for the infrastructure sector, up 10.5% from 2016-17. He also announced a host of measures for the real estate sector, including according infrastructure status to affordable housing. Budget was positive and it will certainly increase the demand. Remonetisation is already helping, and will further help (in increasing demand). Not to forget, we had a favourable monsoon. Next week, shares of ACC Ltd and Ambuja Cements Ltd are seen negative.
