Cement Stocks Outlook
Seen dn; weak demand may hit Jul-Sep earnings
This story was originally published at 22:11 IST on 20 September 2024
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MUMBAI – Shares of cement companies may fall next week as week demand during the ongoing monsoon season is likely to weigh on the earnings for the September quarter. However, a fall is likely to be restricted amid expectation that demand will improve in the second half of this financial year.
HDFC Institutional Research said demand in the industry was almost flat on year during the September quarter, according to the brokerage's interaction with UltraTech Cement's management. With demand low, there is extreme competition between companies, which has also forced companies to keep prices low, analysts said.
However, analysts hope that demand will improve once construction activity picks up post monsoon. Some are seeing signs of improving demand as the industry has absorbed price hikes attempted this month to some extent. "In last 15 days, there has been a price hike of 25-35 rupees/bag in non-trade and 10- 15 rupees/bag in trade," Centrum Broking said in a note on Wednesday.
Analysts also expect the ongoing consolidation in industry, where large players are buying smaller companies, to benefit companies in the long run. This consolidation is likely to help stabilise prices at higher levels and benefit large players, Centrum Broking said.
TOP HEADLINES
* SBI Mutual Fund increases shareholding in Nuvoco Vistas to 9.37%
* HDFC Sec sees UltraTech margins improving from FY26, keeps 'add' rtg
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:
| Company | Price | Week-on-week change in % | Resistance | Support |
| ACC | 2443.20 | (-)3.00 | 2482.90 | 2393.50 |
| Ambuja Cements | 616.55 | (-)2.10 | 625.90 | 602.40 |
| India Cements | 361.65 | (-)1.50 | 372.40 | 354.00 |
| Shree Cement | 25141.70 | (-)2.90 | 25576.20 | 24533.80 |
| UltraTech Cement | 11798.30 | 0.70 | 12004.90 | 11476.30 |
| Nifty 50 | 25790.95 | 1.70 | 26111.60 | 25266.30 |
| S&P BSE Sensex | 84544.31 | 2.00 | 85649.00 | 82635.30 |
End
Reported by Anshul Choudhary
Edited by Akul Nishant Akhoury
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