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Stocks of major cement companies are seen under pressure in the coming sessions as sentiment for the sector remains poor due to unusually low demand. Investors will take cues from March despatches data, due next week. The demand has slowed down considerably, particularly in the infrastructure and urban housing segments. Dealers indicated that a number of negative factors are depressing demand; these include tightness in finance, low government spending, shortage in construction material, and poor sentiment due to sluggish economic growth. The pan-India cement prices are currently 1% higher year-on -year, and flat from a month ago. Despite a seasonally strong period, most cement companies despatches have been falling sequentially since January. With cement companies having failed to raise prices of the commodity over the past two months amid low demand, investors are worried about cement makers performance during Jan-Mar. Expectations of poor quarterly earnings may lead to some selling in cement stocks. The shares of the top three cement companies--UltraTech Cement, ACC and Ambuja Cement--have been trading with a negative trend and this may continue going forward.
Stocks of major cement companies are seen under pressure in the coming sessions as sentiment for the sector remains poor due to unusually low demand. Investors will take cues from March despatches data, due next week. The demand has slowed down considerably, particularly in the infrastructure and urban housing segments. Dealers indicated that a number of negative factors are depressing demand; these include tightness in finance, low government spending, shortage in construction material, and poor sentiment due to sluggish economic growth. The pan-India cement prices are currently 1% higher year-on -year, and flat from a month ago. Despite a seasonally strong period, most cement companies despatches have been falling sequentially since January. With cement companies having failed to raise prices of the commodity over the past two months amid low demand, investors are worried about cement makers performance during Jan-Mar. Expectations of poor quarterly earnings may lead to some selling in cement stocks. The shares of the top three cement companies--UltraTech Cement, ACC and Ambuja Cement--have been trading with a negative trend and this may continue going forward.
