Cement Stocks Outlook for the week – 27.06.2016 to 01.07.2016, To take cues from broader markets post Brexit
( www.rupeedesk.in )
Cement stocks are likely to take cues from the broader
market, which in turn is seen volatile next
week as foreign institutional investors are expected to
continue selling due to uncertainty following
the 'Brexit'. UK voting to leave the European Union has sent
shockwaves across markets worldwide.
What could also add to the volatility is the fact that next
week traders will roll over positions to the
July derivatives contracts ahead of the expiry of the June
series on Thursday. The cement sector's
fundamentals are seen rather stable with demand recovering,
albeit at a slow pace, in some parts of
the country.
Pricing growth is also seen in east and south India. Cement
prices in Andhra Pradesh and Telangana
recovered by around 60 rupees per 50-kg bag in May-Jun,
after a sharp decline in March. Price hikes
by companies in northern and central India in March
sustained through Apr-Jun and will support
earnings of companies based in northern India, while aiding
pan-India companies. Positive on the
medium-term outlook of stocks of companies such as UltraTech
Cement and JK Lakshmi Cement.
Stocks of these companies are preferred bets due to their
better distribution and brand strength in
key geographies. UltraTech's capacity expansion will hold
the company in good stead to meet any
sudden spurt in cement demand.