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Cement Stocks Outlook For The Week – 20 To 24.11.2017

Cement Stocks Outlook For The Week – 20 To 24.11.2017

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Cement Stocks Outlook For The Week – 20 To 24.11.2017

Next week, the stocks of cement companies are seen weak due to concerns about the price of the commodity and profitability of the Companies. The all-India cement prices declined by 6 rupees per 50- kg bag in November. Cement prices in the country, except the west, have returned to March levels. Infra (infrastructure), housing - there are triggers for demand to go up. But prices aren't going up as was expected; execution seems to be the Problem. The prices of petroleum coke increased to $105/tn in November, thereby increasing fuel costs for cement companies. Cement manufacturers reported higher fuel costs in Jul-Sep and the trend is likely to continue in the second half of the year. The rising costs coupled with weak prices may lead to earnings downgrade for cement companies. However, remain positive about the sector in the medium- to long term as infrastructure spending by Central and state governments and a pick up in affordable housing are expected to increase the demand for the commodity. Besides, a good monsoon is also seen boosting rural income which would lead to higher demand for cement.

Source : Cogencis Information Services Ltd.

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