Cement Stocks Outlook for the week – 30.01.2017 to 03.02.2017
Cement Stocks Outlook for the week – 30.01.2017 to 03.02.2017
Stocks of cement companies are seen rising next week as quarterly results from UltraTech Cement Ltd and India Cements Ltd have tempered fears of a sharp decline in the sector's profitability after demonetisation. Despite dealers across the country undertaking price cuts of 10-15% to clear inventories, UltraTech reported a much lower-thanexpected sequential decline in its Oct-Dec consolidated net profit, and India Cements' bottomline soared 11-fold. UltraTech's consolidated net profit was up 5.1% on year.Finance Minister Arun Jaitley will present the Union Budget for 2017-18 (Apr-Mar) on Wednesday, and this will be another factor that will be closely watched. Next week, ACC, Shree Cement, JK Cement, JK Lakshmi Cement and Dalmia Bharat will report their earnings. The earnings for UltraTech and India Cements have provided a boost to cement stocks as their performance was much better than market expectations. The Budget can provide a fresh impetus to the stocks if there is a greater emphasis on housing for all. We expect Jaitley to allot more funds for infrastructure and housing schemes. Housing accounts for more than 60% of demand for cement companies, and any initiatives from the government for it could boost investor sentiment. However, there are some concerns about rising prices of coal and petroleum coke, which are key raw materials.
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Cement Stocks Outlook for the week – 30.01.2017 to 03.02.2017
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Stocks of cement companies are seen rising next week as quarterly results from UltraTech Cement Ltd and India Cements Ltd have tempered fears of a sharp decline in the sector's profitability after demonetisation. Despite dealers across the country undertaking price cuts of 10-15% to clear inventories, UltraTech reported a much lower-thanexpected sequential decline in its Oct-Dec consolidated net profit, and India Cements' bottomline soared 11-fold. UltraTech's consolidated net profit was up 5.1% on year.Finance Minister Arun Jaitley will present the Union Budget for 2017-18 (Apr-Mar) on Wednesday, and this will be another factor that will be closely watched. Next week, ACC, Shree Cement, JK Cement, JK Lakshmi Cement and Dalmia Bharat will report their earnings. The earnings for UltraTech and India Cements have provided a boost to cement stocks as their performance was much better than market expectations. The Budget can provide a fresh impetus to the stocks if there is a greater emphasis on housing for all. We expect Jaitley to allot more funds for infrastructure and housing schemes. Housing accounts for more than 60% of demand for cement companies, and any initiatives from the government for it could boost investor sentiment. However, there are some concerns about rising prices of coal and petroleum coke, which are key raw materials.
