Cement Stocks Outlook for the week – 18 to 22.08.2014
( www.rupeedesk.in )
Stocks of major cement companies are expected to remain in the green during the week
as the general mood around the stocks is positive on expectations of a volume pick-up.
The ongoing monsoon, notwithstanding, cement sector stocks are likely to trade with a
positive bias as market sees green shoots on demand.
Cement volume growth showed rather encouraging signs during the Apr-Jun quarter with
pan-India production growth of 9.6% year-on-year.
UltraTech, JK Lakshmi and JK Cement posted 15% plus volume growth during
Apr-Jun, and ACC, Ambuja and Heidelberg reported 4-9% growth. However, volumes
declined for South-based companies such as Ramco, Dalmia and India Cements.
However, profitability improvement was not as sharp due to continuing cost increases,
particularly overheads.
Cement sector continues to provide best play on the potential cyclical recovery in
investment in the economy. Our preferred picks are UTCEM (UltraTech Cement) and
SRCM (Shree Cement) among large caps and JKCE (JK Cement) and JKLC (JK Lakshmi Cement) among mid-caps.
