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Informist, Friday, Aug 2, 2024

MUMBAI - The cement stocks are expected to remain muted in the upcoming week, following subdued earnings in the sector so far, analysts said. In the near term, the prices of cement are expected to remain largely unchanged, which may result in cement stocks remaining rangebound.

"Price hikes are a near-term trigger for the cement stocks, which is expected to remain unchanged before September. A price hike is expected when the monsoon ends," a research analyst covering the sector said. Meanwhile, in the medium and long term, analysts remain bullish on the stock as the volume and realisation in the sector are expected to improve.

As per the analyst, large players in the sector are expected to perform relatively better than the smaller players. Large players, in terms of volume, cost efficiency, and profitability, are better placed, the analyst said. Meanwhile, the smaller players are already at their full utilisation. Among large players, UltraTech Cement is a stock to watch, another analyst said. The volume and realisation is better for UltraTech compared to its peers. Shree Cement and JK Cements are also some stocks to watch out for, the research analyst said.

Investors will look at Shree Cement and Grasim Industries next week, as these companies are slated to announce their earnings. Shree Cement would likely have faced the brunt of tepid volume growth and price cuts in the reporting quarter, resulting in weak revenue and net profit growth compared with the previous quarter. The Indian cement industry is dependent on domestic demand and, due to feeble demand, cement companies were unable to raise prices during the June quarter.

Meanwhile, higher volume in both key segments, viscose and chemicals, is expected to have propelled Grasim Industries' standalone revenue growth in the June quarter on an annual basis. However, lower realisations, higher costs, operating margin contraction, and higher tax would likely have led to a fall in the bottomline of the company.

TOP HEADLINES
* Nuvoco Vistas Apr-Jun consol PAT falls 80.4% YoY, sales fall 6%
* JK Lakshmi Apr-Jun PAT doubled on year to 1.56 bln rupees
* Earnings Review: Ambuja Cements sales, PAT dn YoY on weak realisations
* Ambuja Cements Apr-Jun PAT falls 11.5% YoY; sales down 4.5%
* PRESS: JSW Cement joins race to buy CK Birla's Orient Cement
* Earnings Review: Volume growth, low costs fail to lift ACC revenues
* ACC Apr-Jun consol PAT falls 22.5% YoY, sales down almost 1%
* Earnings Outlook:Shree Cement sales seen tepid, EBITDA dn sharply QoQ
* UltraTech Cement makes open offer to India Cements' public shrholders

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjali Singh
Edited by Manisha Baxla

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