Cement Stocks Outlook for the – 19 to 23.06.2017

Cement Stocks Outlook for the – 19 to 23.06.2017

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Cement Stocks Outlook for the – 19 to 23.06.2017 )

Stocks of cement companies are seen trading on a mixed note next week and activities are likely to remain stock specific. Demand for cement is likely to be subdued in regions where southwest monsoon has reached, and may affect companies that have a strong presence in those areas. Demand, however, may be better in those parts where monsoon has not arrived as various agencies would rush to complete ongoing infrastructure projects before it starts raining. The southwest monsoon has so far covered most parts of south and eastern India and is likely to cover more parts of central India in the next three-four days. There may have been a pick-up in demand in some states because of the need to complete ongoing infrastructure projects before monsoon. However, as the monsoon progresses ahead, demand and prices will go down. Cement demand normally falls during monsoon as construction work almost comes to a standstill. However, a good monsoon will give a boost to demand in Oct-Mar. The hikes and cuts in cement prices are also likely to lend cues to the stocks of cement companies. Cement companies' Apr-Jun earnings are also likely to get a boost because of the hikes undertaken by the companies in April and May, Despite the price cuts undertaken in some regions in June, allIndia average cement prices were likely to end up 7% higher in Apr-Jun than the previous quarter, the report said. Positive on cement sector in the long-term as they expect higher spending on infrastructure by the central and state governments along with the infrastructure status given to affordable housing in Union Budget 2016-17 (Apr-Mar) to improve demand.

Source : Cogencis Information Services Ltd.