Cement Stocks Outlook For The Week – 15 to 19.01.2018

Cement Stocks Outlook For The Week – 15 to 19.01.2018

             Equity Cash/Futures/Options Segment 

The shares of cement companies are seen positive next week due to expectations of an improvement in demand of the commodity from this month, as it marks the beginning of the busy construction season. Investors will also keep an eye on the announcement of Oct-Dec earnings by cement companies. UltraTech Cement Ltd is scheduled to announce its earnings for the quarter ended December on Thursday. On Thursday, Shree Cement Ltd said it posted a net profit of 3.3 bln rupees for Oct-Dec, up 42% on year. However, its operating margin contracted by 150 basis points because of a sharp increase in input costs. The rise in prices of petroleum coke and a 7.5% increase in import duty on the fuel has left cement manufacturers grappling with higher input costs. On Tuesday, Coal India Ltd hiked price by an average of 9%. While the price of petroleum coke rose 32% on year in Apr-Sep, coal prices saw a rise of 44%, resulting in higher power and fuel expenses for cement companies, ICRA had said in a report earlier this month. The profitability of cement companies will depend on their ability to pass on the increased costs. The cement companies have raised prices of 50-kg bags by 10 rupees a bag across the Delhi-National Capital Region. In Mumbai, cement prices
were hiked by 15-40 rupees per bag.

Source : Cogencis Information Services Ltd.

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