Cement Stocks
Outlook for the week – 20 to 24.07.2015
(Seen negative, weak ACC earnings
to weigh)
( www.rupeedesk.in )
Stocks of cement companies may come under pressure next week as
investors may prefer to book
profits following weak results of sector major ACC Ltd which posted a
45% decline in Apr-Jun net
profit.
Most other companies in the sector are likely to report weak earnings
for the quarter ended June
as both demand and prices were muted.
ACC's Apr-Jun consolidated net profit declined to 1.33 bln rupees from
2.43 bln rupees a year ago,
way below estimates of 2.10 bln rupees. The company's consolidated
revenue declined to 29.60 bln
rupees from 30.10 bln rupees.
ACC said that the cement market was "challenging" and
volumes were subdued in Apr-Jun as
construction activity remained dull in both infrastructure and housing
sectors. The company
though added that it expects demand to pick up in the next few
quarters.
Traders will also take cues from Apr-Jun performance of UltraTech
Cement Ltd which will detail
earnings on Monday. UltraTech is expected to report standalone net
profit of 5.69 bln rupees in
Apr-Jun, down 9% on year.
It will take some time for the government schemes to materialise. The
cement stocks had rallied
earlier on positive sentiments about the pick-up in infrastructure
activities. Although most of the
companies reported low
volumes.