www.rupeedesk.in
Stocks of major cement companies are likely to trade with a negative bias next week as investors remain worried due to a much-lower-than-expected pickup in demand. Cement demand, which typically picks up in October after a slump during monsoon, has remained subdued amid high interest rates that led to a slowdown in real estate and infrastructure activity.
Seasonally demand picked up in Jan 2013 from Dec 2012 but it continues to remain weak (year-on-year) in most parts of the country. We do not expect cement prices to rise materially in the next couple of months, given continuing weak-to-moderate demand growth...and continuing capacity additions. Disappointing Oct-Dec earnings for the top three cement makers--UltraTech Cement, ACC, and Ambuja Cements--has also led to a negative sentiment for the sector. Earnings for the cement heavyweights are not expected to be much better sequentially in Jan-Mar.
