Cement Stocks Outlook for the week – 25 to 29.05.2015
Seen
tracking broader market next week
( www.rupeedesk.in )
Cement
stocks are seen taking cues from the broader market next week in absence of any
major sector-specific trigger. Cement stocks will perform in the way the
(broader market) rally is behaving. If the market is going up by 5%, cement
stocks will not be able to outperform the broader index. Cement stocks are
expected to see recovery in a broader way only after August in anticipation of demand
picking up. Demand has not picked up in the current quarter and with the onset
of monsoon, a recovery is ruled out.
People
will start lapping up cement stocks from August onwards. A long- term
sustainable rally will be seen in cement stocks only after August. It will be a
range bound trade till August. In large cap cement companies, range will be in
terms of enterprise value per tn which is $130 to $160 per tn. Mid cap cement
players will continue to trade in the range of $65 to $75 per tn.
The
Ramco Cements Ltd and India cements Ltd will detail their earnings on May 29.
Stocks of The Ramco Cements and India Cements are likely to perform better next
week based on the strong realisation reported by Sagar Cements Ltd yesterday.
Sagar Cements reported Jan-Mar net profit at 216.9 mln rupees and net sales at
1.9 bln rupees. Short-term trend outlook for cement stocks is positive while
medium trend is negative.
