Cement Stocks Outlook for the week - 28.08.2017 to 01.09.2017

Cement Stocks Outlook for the week - 28.08.2017 to 01.09.2017

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Cement Stocks Outlook for the week - 28.08.2017 to 01.09.2017 )

The shares of cement companies are seen consolidating next week due to weakness in prices because of monsoon season. All-India average cement prices have declined 3.1% on month in August because of monsoon. Monsoon is a weak season for cement as prices decline due to the rains, which bring
construction work almost to a halt. Besides monsoon, implementation of Real Estate Regulation Act and issues with availability of sand in some states also contributed to softening of prices. However, remain positive on the cement sector in medium- to long-term as they expect the demand to improve post-monsoon. The government's focus on infrastructure and affordable housing are also seen boosting cement demand in the country. We continue to remain positive on cement sector. The fall in prices is seasonal and we shouldn't read too much into it. However, the increase in price of petroleum coke will be a concern for cement companies. The price of petroleum coke increased by $6-$8 to $93-$96 per tn in August. Higher petcoke prices are likely to continue to weigh on cement companies' margins. Next week, most of the cement stocks are seen consolidating while UltraTech Cement Ltd may fall as it is looking bearish.

Source : Cogencis Information Services Ltd.