Cement
Stocks Outlook for the week – 02 to 06.05.2016
Seen trading in range with negative
bias
( www.rupeedesk.in )
Stocks of cement manufacturing
companies are seen trading in a range with a negative bias next
week given the persistently weak
demand for the building material in large parts of the country and
lower than estimated Jan-Mar earnings
reported by some large companies. Around a fourth of the
country is facing water scarcity and
drought, which has threatened agricultural output and rural
incomes, in turn making prospects of
cement demand bleak.
Cement companies have also not been
able to hike product prices much, adversely affecting their near term prospects
of profitability. Though Ambuja Cements' sales volume growth is expected to
pick up as demand improves, the
company would continue to lose market share in absence of
capacity increase. We expect Ambuja
Cements' profitability to benefit from increasing pet coke
consumption and other cost
improvement drives.