Cement
Stocks Outlook for the week – 01 to 05.09.2014
( www.rupeedesk.in )
Stocks of major
cement companies are seen following the trend in the broader market
during the week in
the absence of sector-specific triggers. The bias is seen positive on
general optimism over
demand.
Stock indices are
seen trading firm next week after they ended at record closing levels on
Thursday.
We don't expect much
movement in cement stocks in the week ahead. The mood is
festive, in general
and that should reflect in the broader market.
Cement stocks have
sharply outperformed the market over the past six months as midcaps
rallied on strong
earnings and compelling valuations.
We expect strong
volume and price momentum over the next 2-3 years as infrastructure
activity picks up
under the new government, taking the sector deeper into a structural
upcycle.
We forecast a demand
compounded annual growth rate of 9-10% over FY14-FY17, which will support
strong pricing (7-8% CAGR) and profitability.
