Cement
Stocks Outlook for the week – 16 to 20.03.2015
Cement stocks are expected to be in for a sharp
correction next week, given that quite a few of them are over-valued at
present. The correction will also be on account of the fact that the industry
hasn't managed to get its fundamentals in place. We retain positive view on
UltraTech Cement and Grasim Industries in large-cap space. Though, we like
Shree Cement and Ambuja Cements, we believe that valuations are expensive and
hence, would wait for better entry points.
We have a positive view on mid-cap companies under our
coverage. Demand for cement has remained subdued in the absence any major
addition in infrastructure projects, both by the private sector and the
government. In the housing segment too, the demand is slow.
The market may also react to a buzz that cement companies across the board are looking at raising prices after the rail freight hike for the sector. This is not unusual for cement companies to raise prices during March. This is a peak season for cement. Prices have been really low during Jan- Feb, now companies are pushing prices to offset the losses
