Cement Stocks Outlook for the week - 11 to 15.09.2017

Cement Stocks Outlook for the week - 11 to 15.09.2017

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Cement Stocks Outlook for the week - 11 to 15.09.2017 )

 Likely to consolidate on concern over demand Stocks of cement companies are seen trading range-bound next week because of concern about lower prices due to weak demand. Demand for cement has been muted because of the monsoon and disruptions caused due to the implementation of the Goods and Services Tax, which was rolled out on Jul 1. Typically, cement demand is weak during the monsoon, as construction work almost comes to a halt because of the rains. Issues related to availability of sand in states such as Bihar, Uttar Pradesh, West Bengal, and Tamil Nadu have also hit demand for cement. In August, cement prices declined 3.4% on month. However, remain positive on the cement sector in the medium to long term, saying the disruption caused due to the GST rollout was over and demand is set to improve after the monsoon. Demand is likely to firm up in Oct-Mar, it expects the demand to grow 7% a year during 2017-18 (Apr-Mar) to 2019-20 because of faster GDP growth, higher spending on infrastructure and demand from the housing sector. Depending on the rain, demand should start picking up from September or October. Rains have been good this year. It will further boost demand because of higher rural consumption.

Source : Cogencis Information Services Ltd.