Cement Stocks Outlook for the week – 07 to 11.Jul.2014
Stocks of cement companies are seen gaining ahead of the Union Budget, where the
infrastructure sector, especially the housing industry, is likely to get a big push. Allocation
towards infrastructure projects is likely to go up in the Budget. This hike may give a boost to
the cement industry. Extension of investment allowance of 15% for capex beyond FY15
(Apr-Mar), would drive cement demand from industrial segment.
Any concrete measure to boost urban housing, infrastructure, and industrial capital
expenditure will drive strong growth in cement and influence its pricing. The market expects
the government to reduce or remove the excise duty on imported coal and pet coke.
If this is done, the cement companies will get to save a lot of fuel cost, which in turn will
help them. In short-term, mid-cap companies are seen doing well, as their capacities are
just enough to handle demand, regardless of below-normal monsoon this year. Large-cap
companies are not attractive enough at the current levels, for the next week investors are
bullish on stocks of Jaiprakash Associates, India Cements and Ramco Cements
Stocks of cement companies are seen gaining ahead of the Union Budget, where the
infrastructure sector, especially the housing industry, is likely to get a big push. Allocation
towards infrastructure projects is likely to go up in the Budget. This hike may give a boost to
the cement industry. Extension of investment allowance of 15% for capex beyond FY15
(Apr-Mar), would drive cement demand from industrial segment.
Any concrete measure to boost urban housing, infrastructure, and industrial capital
expenditure will drive strong growth in cement and influence its pricing. The market expects
the government to reduce or remove the excise duty on imported coal and pet coke.
If this is done, the cement companies will get to save a lot of fuel cost, which in turn will
help them. In short-term, mid-cap companies are seen doing well, as their capacities are
just enough to handle demand, regardless of below-normal monsoon this year. Large-cap
companies are not attractive enough at the current levels, for the next week investors are
bullish on stocks of Jaiprakash Associates, India Cements and Ramco Cements
