www.rupeedesk.in
Cement stocks are likely to stay in the red next week and continue underperforming, as revival of demand is not seen any time soon. Stocks of cement makers may move against the expected trend of the broader market, which may open flat to marginally positive tracking global markets in the week ahead. Although there is no major reason why the stocks in the segment should remain in the negative, the general sentiment around the sector is gloomy, at least in the short-to-medium term.
According cements stocks have lagged recently owing to poor performance on both volumes and prices. Ongoing monsoons added to the woes of cement manufacturers, as volume off take slowed down further and impacted realizations. Companies are also expected to post a fall in net profit for another quarter.
Limited visibility on revival of the investment cycle continues to dampen the prospects of demand revival. Volume decline for Shree Cements (-6% YoY) was sharper as compared to UltraTech (-3% YoY) and Ambuja (-3% YoY), suggestive of a weaker demand in North India. South (India)-based players reported better performance with volumes for India Cement (+11% YoY) and Madras Cement (+3% YoY) reflecting a healthier trend despite sharp price hikes towards the end of the quarter," it added. In the short term, the pricing situation continues to remain weak while the input cost scenario is also expected to worsen, thus impacting the margins.
Cement stocks are likely to stay in the red next week and continue underperforming, as revival of demand is not seen any time soon. Stocks of cement makers may move against the expected trend of the broader market, which may open flat to marginally positive tracking global markets in the week ahead. Although there is no major reason why the stocks in the segment should remain in the negative, the general sentiment around the sector is gloomy, at least in the short-to-medium term.
According cements stocks have lagged recently owing to poor performance on both volumes and prices. Ongoing monsoons added to the woes of cement manufacturers, as volume off take slowed down further and impacted realizations. Companies are also expected to post a fall in net profit for another quarter.
Limited visibility on revival of the investment cycle continues to dampen the prospects of demand revival. Volume decline for Shree Cements (-6% YoY) was sharper as compared to UltraTech (-3% YoY) and Ambuja (-3% YoY), suggestive of a weaker demand in North India. South (India)-based players reported better performance with volumes for India Cement (+11% YoY) and Madras Cement (+3% YoY) reflecting a healthier trend despite sharp price hikes towards the end of the quarter," it added. In the short term, the pricing situation continues to remain weak while the input cost scenario is also expected to worsen, thus impacting the margins.
