GOLDEN RULES FOR TRADING

Cement Stocks Outlook for the week – 19 to 23.09.2016 In a range next week, some profit booking seen

Cement Stocks Outlook for the week – 19 to 23.09.2016
In a range next week, some profit booking seen

Stocks of major cement manufacturers are seen trading in a narrow range next week, with spells of
profit booking likely as the stocks are still trading at their peak valuations. The stocks are expected to
remain range-bound and experience bouts of profit booking. So far in 2016, stocks of ACC, Grasim
Industries, Ambuja Cements, UltraTech Cement, JK Lakshmi Cement, Shree Cement, India Cements,
Ramco Cements, Heidelbergcement, Mangalam Cement, Dalmia Bharat have risen 20-106%. Stocks
of JK Lakshmi Cement touched a record high yesterday.

Cement stocks have touched their peak valuations in the last couple of years, driven by demand in
south India and the proposed development of new cities in Telangana and Andhra Pradesh. The
average capacity utilisation rate of domestic cement makers' plants had touched a low of 68% in the
year ended March due to a supply glut. In the improving demand scenario, the utilisation rates are
seen rising to 72% and 78% for 2017-18 and 2018-19, respectively. In the medium- to long-term, a
pick-up in construction activity in the infrastructure space, revival of investment cycle and likely
recovery of rural demand following good rains will benefit the cement industry.