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Informist, Friday, Nov. 8, 2024

MUMBAI - Shares of cement companies are likely to see muted movements next week, particularly in the absence of triggers in the sector and as the earnings season comes to an end. Analysts said the short-term sentiment towards the cement industry will remain weak, particularly due to poor financial performance reported for the September quarter and a delay in infrastructure spending by the government, coupled with pricing pressures. However, the medium-to-long-term outlook for the industry is positive, as the government is likely to announce new infrastructure projects in the coming months and the demand environment is likely to get better, they said. 

Though some cement manufacturers had increased their prices in the last few months, analysts said the benefit was not getting absorbed, particularly because of muted demand. "Consolidation in the south and higher utilisation in the north can bring better pricing growth in these regions," Centrum Broking said in its earnings preview report about the sector.

On the earnings front, Shree Cement and The Ramco Cements are scheduled to release their quarterly results on Monday. Both the companies, like most of their industry peers, are expected to post poor results due to lower realisations amid stiff competition, a slowdown in demand because of the extended monsoon and consequent floods in several regions, and delays in government spending post-General Elections, broking firms said in their earnings preview reports. 

Shree Cement's net profit is expected to nosedive nearly 84% on year to INR 789.36 million and revenue is seen falling 14% to INR 39.47 billion, according to an average of estimates from 14 broking firms. The Ramco Cements is expected to post a net loss of INR 19.33 million compared to a profit of INR 1.01 billion, as per the average of estimates from nine broking houses. The company's top line is seen falling nearly 13% on year to INR 20.30 billion. Shares of Shree Cement closed 1% lower at INR 24,533 on the National Stock Exchange on Friday and those of The Ramco Cements ended 1.2% lower at INR 865.80.

TOP HEADLINES
* India Cements net loss widens YoY to 2.4 billion in Jul-Sept
* Delhi HC quashes stamp duty charges, penalty against Ambuja Cements
* Ultratech's UAE arm ups stake to 65.9% in Abu Dhabi-based co for $22.02 mln
* JK Lakshmi Cement Jul-Sept net profit falls over 90% YoY, sales dn over 21%
* Grasim denies report of co looking to buy stake in Akzo Nobel India

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 Anjana Therese Antony
Edited by Saji George Titus

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