Cement Stocks Outlook
for the week – 28.07.2014 to 01.08.2014
( www.rupeedesk.in )
Stocks of major cement companies to trade with a positive
bias on positive sentiments on
the sector, even though ongoing monsoon may dampen the spirit
a bit. The big three
cement companies--UltraTech Cement, Ambuja Cements, and
ACC--have already
detailed their Apr-Jun earnings and the market has factored
them in. The companies'
earnings have been more or less in line with market
expectations.
Cement demand has started showing signs of recovery after
several quarters of
disappointment. After posting marginal growth in last 1.5
years the cement demand
appeared to have jumped to over 8.5% in June quarter, helped
partially by a delayed
monsoon. It added that improved demand has helped maintain a
rather strong pricing
environment and the worst on the earnings front is behind
for the sector.
Usually, cement stocks fall in the monsoons due to weak
demand or pricing. However,
Goldman Sachs said news flows on award of any significant
projects given the new
government's focus on infrastructure and low cost housing
could cushion the seasonal
weakness. Positive on the sector as it believes cement
demand will rise structurally.
