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Stocks of major cement companies are likely to trade rangebound next week as investors may wait for demand for the commodity to rise before taking any fresh views on the sector. Stocks of most cement makers have been inching upwards over the past few weeks in anticipation of a rise in demand. In line with our expectation, cement prices turned weak across regions (except East) during late February (peak month of activity) on account of weak secondary sales. Cement despatches of all major companies fell in February. UltraTech Cement, India's largest cement maker by capacity saw a 6% year- on-year fall in despatches in February, and a 4% fall in production. Shree Cement's despatches declined 16% sequentially in February, and production 13%. Small players such as Mangalam Cement also saw a fall in sales and output. Going forward, the sector is likely to attract investors only when the demand situation changes significantly. Companies may not benefit much by raising prices by 2-5 rupees per 50-kg as costs pressures are huge. Additionally, any announcements on the price front will also be eyed. Cement makers' continued efforts to raise prices of the commodity over the past few weeks have fallen flat.
Stocks of major cement companies are likely to trade rangebound next week as investors may wait for demand for the commodity to rise before taking any fresh views on the sector. Stocks of most cement makers have been inching upwards over the past few weeks in anticipation of a rise in demand. In line with our expectation, cement prices turned weak across regions (except East) during late February (peak month of activity) on account of weak secondary sales. Cement despatches of all major companies fell in February. UltraTech Cement, India's largest cement maker by capacity saw a 6% year- on-year fall in despatches in February, and a 4% fall in production. Shree Cement's despatches declined 16% sequentially in February, and production 13%. Small players such as Mangalam Cement also saw a fall in sales and output. Going forward, the sector is likely to attract investors only when the demand situation changes significantly. Companies may not benefit much by raising prices by 2-5 rupees per 50-kg as costs pressures are huge. Additionally, any announcements on the price front will also be eyed. Cement makers' continued efforts to raise prices of the commodity over the past few weeks have fallen flat.
