www.rupeedesk.in
Stocks of major cement companies are likely to trade with a negative bias next week as demand concerns remain on lack of any real pickup. According to the demand scenario is a bit unclear, affecting the pricing power of cement companies. While there has been some upward movement in prices in November, several similar attempts have had to be rolled back.
For long, market has been expecting a turnaround in the demand scenario post the monsoon season and as a countdown to the general elections in mid-2014, but very little has happened on the ground both in housing as well as infrastructure activity. We do not expect macro-recovery theme to play out and see disappointment on expected election spends and good monsoons. Cement producers will have to redraw growth strategy and expansion plans.A declining trajectory of government spending is seen from the earlier levels of around 15% to lower levels of 8-10%, and possibly even lower.
Stocks of major cement companies are likely to trade with a negative bias next week as demand concerns remain on lack of any real pickup. According to the demand scenario is a bit unclear, affecting the pricing power of cement companies. While there has been some upward movement in prices in November, several similar attempts have had to be rolled back.
For long, market has been expecting a turnaround in the demand scenario post the monsoon season and as a countdown to the general elections in mid-2014, but very little has happened on the ground both in housing as well as infrastructure activity. We do not expect macro-recovery theme to play out and see disappointment on expected election spends and good monsoons. Cement producers will have to redraw growth strategy and expansion plans.A declining trajectory of government spending is seen from the earlier levels of around 15% to lower levels of 8-10%, and possibly even lower.
