Cement Stocks Outlook for the week – 16 to 20.06.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Stocks of major cement companies are
expected to follow the broader market next
week in the absence of a
sector-specific trigger. The bias though is likely to be slightly
negative with the advent of monsoon
rains. Global developments will be key for Indian
share indices as geopolitical
tensions in Iraq triggered a selloff across global equities
yesterday. Market players will also take
cues from the outcome of US Federal Open
Market Committee's two-day policy
meeting on Tuesday and Wednesday. The week will
begin with the release of Wholesale
Price Index-based inflation data for May on
Monday.
Cement demand is usually low during
monsoon and that will reflect on stocks of cement
companies too. The mood will be low.
Although the medium- to long-term demand for
cement as well as earnings of
companies look positive ‘a material downside risk to our
estimates’ is the possibility of
monsoon rains to be disappointing this year. Prices, too,
are seen remaining subdued during the
monsoon season, after a recent hike.
The top three cement
manufacturers--UltraTech, ACC and Ambuja—have already raised
product prices in the range of 10-60
rupees per bag. They were followed by small
players. The price hike in southern
India, particularly Andhra Pradesh, is high at 50-60
rupees per bag, while the rise was in
the range of 10-15 rupees in the rest of the
country.
