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Informist, Friday, Dec. 27, 2024

MUMBAI - In the absence of major triggers in the domestic market, shares of cement companies are likely to be muted next week, derivatives analysts said. However, the medium-term outlook on the sector remains bullish as investors are betting on the government's capital expenditure to gain traction in the remaining period of the financial year. This, coupled with a recovery in demand, growth in the housing and real estate sectors, and price hikes, would support the sector in the coming quarters, they said.

Some analysts also believe that earnings of cement players would be slightly better in the December quarter. The sector was among the few to post poor growth in both net profit and revenue in the September quarter. "Supported by 3% recovery in quarterly average cement prices and the benefits of operating leverage, the cement industry is poised for a sequential recovery in earnings in Q3FY25 (Oct-Dec)," Elara Securities said in its research report. The broking firm also expects price hikes across India in January. Some players had raised their prices in early December and analysts said they would wait for the impact of this measure to kick in before trying to predict the trend in the coming months.

Reports said the government used only 37.3% of the budgeted effective capital expenditure, or the total outlay for building capital assets, in the first half of the current financial year. This expenditure was INR 5.60 trillion, out of the INR 15.02 trillion budgeted for the full financial year, The Economic Times reported this week. 

Among top gainers this week was India Cements, up nearly 10%. The stock closed 0.4% lower Friday at INR 372.55 on the National Stock Exchange. UltraTech Cement fell slightly this week and closed 0.5% lower Friday at INR 11,406.55. The company acquired nearly 33% stake in Indian Cements and is now its sole promoter. The company also said it will buy 8.7% stake in Star Cement for INR 8.51 billion. 

TOP HEADLINES
* UltraTech Cement to buy 8.7% stake in Star Cement for INR 8.51 bln
* ACC gets two GST demand orders of INR 721 mln from Chhattisgarh authority
* UltraTech acquires 32.72% stake in India Cements, is now co's sole promoter
* UltraTech Cement to buy 26% stake in Clean Max Sapphire for INR 457.68 mln
* CCI approves UltraTech Cement's acquisition of India Cements

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 Rajeev Pai

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