Cement Stocks Outlook for the week – 04 to 08.05.2015
( www.rupeedesk.in )
Stocks
of major cement companies are likely to continue with the downward trend next
week on account of weak demand and low prices of the building material. Any
major near-term triggers for the sector are unlikely.
The
dampened market sentiment during the past few weeks is likely to weigh heavily
on cement stocks. Share indices in general are expected to tread lower next
week amid absence of any positive fundamental triggers, and lack of clarity on
whether foreign institutional investors will have to pay minimum alternate tax
for earlier transactions.
Retrospective
taxation fears and weak corporate earnings will continue to weigh heavily on
the market, while the introduction of key policy bills such as the Goods and
Services Tax will be keenly watched. Demand for cement has been weak and is
likely to remain so for the next two-three quarters.
Cement
stocks are unlikely to move up in short-term. Demand for cement is very
sluggish, prices are not recovering. Market is also weak. It will take around
one to two quarters for the shares to do well. We prefer shares of Ultratech
Cement thanks to abiding investor interest. "Decline in UltraTech Cement
stocks will not be as much as in ACC and Ambuja Cements.
Cement
stocks have been under selling pressure for the past few weeks and the
short-term outlook for them is negative, as they have so far underperformed the
broader indices.
