Cement Stocks Outlook for the Week – 20 to 24.06.2016
Seen trading in thin band
with positive bias
( www.rupeedesk.in )
After a rather tepid
week, stocks of cement-manufacturing companies are seen trading in a thin band with a positive bias next
week. Upbeat about the medium-term prospects of UltraTech Cement among large-cap
companies, and JK Lakshmi Cement among mid-cap cement manufacturers. Stocks of UltraTech Cement are
expected to gain from any spurt in demand, given that the company has procured 21.2 mln tn per
annum of cement capacity from Jaiprakash Associates. JK Lakshmi Cement's shares are seen
positive, in light of the company's focus on accelerating growth in eastern India.
The region continues to
register strong cement sales growth due to high spending by state governments even as sales
in west India remain weak, primarily due to the drought in Maharashtra. Overall demand for cement
had been weak across regions over the past few months, and cement companies have even had
to push sales volume in the interest of market share. Cement prices in Andhra Pradesh and
Telangana have recovered by around 60 rupees per 50-kg bag in May-Jun, after a sharp decline in March.
Price hikes taken in northern and central India in March sustained through Apr-Jun and will support
earnings of companies based in northern India, while also aiding pan-India companies.
