Cement Stocks Outlook
Near-term outlook positive as demand expected to rise
This story was originally published at 19:47 IST on 13 December 2024
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MUMBAI – Analysts are increasingly becoming bullish on cement companies on expectation of improvement in demand after the festival season, supported by an expected pickup in the government's capital expenditure cycle. "Once we see a clear sign of demand pickup, companies will hike prices further," a research analyst tracking cement and construction companies at a domestic broking firm said. The housing and real estate sectors will also contribute to the growth of cement companies, the analyst said.
Analysts said the market is factoring in boost in capex from the government but that valuations of some companies in the sector are expensive, while those of others are reasonable. About two months ago, analysts were not bullish on the sector due to poor earnings performance, muted demand and volume, pricing pressures, and lower realisations.
Cement was among the few sectors which saw most companies post an on-year decline in both net profit and revenue for the September quarter. Early this month, some companies raised cement prices by INR 10-30 per bag and analysts expect the impact of these hikes to kick in.
Industry volume is expected to have grown 3-5% on year in October and November after a sluggish growth of 1-2% in Apr-Sept, Motilal Oswal Financial Services said in its report Thursday. The broking firm expects the volume to grow 8-9% in Oct-Mar as the government's capital expenditure is expected to pick up, which should lead to improvement in demand. "We also expect FY26 to start on a strong note in terms of cement demand as Mar-Jun is the strongest period for cement consumption," the broking firm said.
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Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| ACC LTD | 2248.05 | (-)0.50 | 2295.40 | 2171.40 |
| AMBUJA CEMENTS LTD | 572.75 | 1.30 | 581.50 | 559.70 |
| ANDHRA CEMENTS LTD | 83.75 | (-)1.80 | 86.00 | 81.00 |
| GRASIM INDUSTRIES LTD | 2692.70 | (-)0.30 | 2750.60 | 2591.60 |
| J.K. CEMENT LTD | 4749.10 | 3.30 | 4837.90 | 4593.30 |
| JK LAKSHMI CEMENT LTD | 864.00 | 7.10 | 889.40 | 824.00 |
| SAGAR CEMENTS LTD | 229.07 | (-)3.20 | 237.60 | 220.60 |
| SHREE CEMENT LTD | 27591.45 | 1.90 | 28051.50 | 26864.30 |
| ULTRATECH CEMENT LTD | 12083.90 | 2.00 | 12366.00 | 11589.00 |
| INDIA CEMENTS LTD | 344.65 | (-)4.30 | 351.80 | 334.90 |
| NIFTY 50 | 24768.30 | 0.40 | 25192.00 | 23969.00 |
| BSE SENSEX | 82133.12 | 0.50 | 83607.70 | 79345.50 |
End
Reported by Anjana Therese Antony
Edited by Ashish Shirke
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