Cement Stocks Outlook
May remain tad weak next wk; UltraTech result due Mon
This story was originally published at 23:15 IST on 18 October 2024
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MUMBAI - Shares of cement companies in the Nifty 500 index may extend losses slightly next week, though the medium-term outlook remains bullish. Analysts see green shoots of recovery in demand after there was a lag in execution of projects during general elections and the heavy monsoon. They also see more price hikes in the coming months, which may bode well for these companies. "We expect demand revival from Q3FY2025 (Oct-Dec) after festive season besides improved cement prices and contained cost structure," Sharekhan Ltd. said in its report, adding that it is positive about the cement sector. Among preferred picks of the brokerage house are UltraTech Cement, Shree Cement, and The Ramco Cement.
However, the September quarter corporate earnings are highly likely to show on-year decline in earnings, with lower realisations, weak demand, and sluggish sales volume expected to drag down cement companies' financials. Market participants await the September quarter earnings of UltraTech due Monday. The cement manufacturer's consolidated net profit is seen 26% down on year INR 9.5 billion and net sales are seen falling 4.4% to INR 153.06 billion, according to the average of estimates from six brokerages. Analysts expect UltraTech to be the biggest beneficiary of multi-year industry upcycle and post industry-leading volume growth.
Further, ACC is scheduled to release its results Thursday. The company's consolidated net profit is expected to fall nearly 40% on year to INR 2.34 billion and revenue is seen 4% down at INR 42.62 billion, as per the average of estimates from 15 broking firms. The weak performance could be attributed to unseasonal rains, softer cement prices, and delay in allocation of funds for infrastructure projects owing to general elections, analysts said in earnings preview reports.
TOP HEADLINES
* UltraTech commissions additional 1.2 mtpa grinding capacity in Tamil Nadu
* Earnings Outlook: Low prices to hit Ambuja Cements' consol PAT Jul-Sept
* Earnings Outlook: ACC's net profit, sales, margins seen down in Jul-Sept
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 | 2285.65 | (-)1.20 | 2324.00 | 2217.00 |
| Ambuja Cements | 573.95 | (-)1.90 | 588.60 | 551.70 |
| India Cements | 362.00 | (-)0.10 | 366.20 | 355.40 |
| Shree Cement | 24325.25 | (-)0.10 | 24549.70 | 23975.80 |
| UltraTech Cement | 11069.30 | (-)3.10 | 11275.70 | 10797.80 |
| Nifty 50 | 24854.05 | (-)0.40 | 25087.90 | 24450.80 |
| S&P BSE Sensex | 81224.75 | (-)0.20 | 81990.30 | 80026.50 |
End
Reported by Anjana Therese Antony
Edited by Vidhi Verma
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