Cement Stocks Outlook for the week – 21 to 25.07.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Announcement of UltraTech Cement's
Apr-Jun results, the net profit of which is seen
muted, will set the tone for the next
week's trading in Stocks of major cement
companies. The Mumbai-based Aditya
Birla Group Company is seen posting a net profit
growth of just 1% year-on-year at 6.8
bln rupees for the quarter ended June. The
company's net sales are seen growing
12% year-on-year to 55.80 bln rupees. It is
scheduled to detail Apr-Jun earnings
on Saturday. The mood though is likely to be
positive as on the whole cement
manufacturers are seen posting decent increase in their
net profit numbers -- in the range of
8-10%.
Although there are reports of price
cut by cement companies recently, the focus will be
on results. Ultratech Cement Ltd, ACC
Ltd, Ambuja Cements Ltd have cut cement prices
by 5-15 rupees per 50-kg bag across
the country. A bag of cement in north India will
now cost around 285 rupees per bag
from around 300 rupees earlier. In south India, a
bag would cost around 255 rupees,
down from around 260 rupees. Similarly, in west
India, a cement bag would now cost
around 285 rupees, down from around 290 rupees
earlier.
We remain positive on the sector as
we expect cement demand to pick-up leading 8%+
CAGR from FY16E (Apr-Mar) onwards.
This should boost utilization to firm up and
increase pricing power of
the industry.