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Informist, Friday, Jan. 24, 2025

MUMBAI - Analysts expect announcements related to the government's spending on infrastructure and rural development from the Union Budget for 2025-26 (Apr-Mar), scheduled on Feb. 1, to provide near-term cues to cement stocks. Some analysts believe cement stocks may rise on likely positive announcements in the Budget, while a few others feel there would be mixed reactions. After the price hike of INR 15-INR 20 per bag announced this month, further price hikes are expected in the next three to four months, analysts said.

Recovery in prices and demand amid a pick-up in capital expenditure spending from both the Centre and the states has put the sector in the limelight, ICICI Securities said in a research report, a view which most analysts echoed. UltraTech Cement expects to generate a sustainable volume growth of 7-8% due to the government's focus on infrastructure and housing projects, along with increased demand from urban and rural segments.

UltraTech Thursday reported an on-year decline in consolidated profit for the December quarter, but exceeded analysts' estimates. Revenue rose on year, beating analysts' estimates. UltraTech has a target to grow over 10% and aims to beat industry growth of 6-7% in FY26, it said in the post-earnings analysts' conference call. The company's shares surged soon after it posted the results during market hours Thursday and ended 6.8% higher, but ended down 1.2% Friday.

Among other cement companies that announced their results, Nuvoco Vistas Corp. posted a consolidated net loss of INR 613.7 million and a 0.5% fall in its revenue from a year ago. Dalmia Bharat's bottom line plunged nearly 77% on year and missed analysts' expectations by a wide margin.

Among the companies scheduled to announce their results next week, Ambuja Cements, due Wednesday, is set to post a near 12% on-year decline in consolidated net profit to INR 7.25 billion, as per an average of estimates from eight broking houses. Its consolidated revenue is seen rising 3.7% on year to INR 84.28 billion

ACC, due Monday, is expected to post an on-year decline of 36% in its net profit to INR 3.44 billion and its sales to rise slightly to INR 49.54 billion. Shree Cement and J.K. Cement's earnings are due Thursday and Feb. 1, respectively.

TOP HEADLINES
* Earnings Review: UltraTech Oct-Dec net profit contracts for 2nd straight qtr
* Analyst Concall: UltraTech sees FY26 growth over 10% vs 6-7% industry growth
* Earnings Outlook: Low margins to hit Ambuja Cements' consol PAT Oct-Dec
* Earnings Outlook: ACC net profit, sales, margins seen in slow lane Oct-Dec
* Nuvoco Vistas posts consol loss of INR 613.7 mIn in Oct-Dec vs profit yr ago
* Earnings Outlook: UltraTech net seen dn for second qtr on lower realisations
* India Cements' net loss widens on year to INR 4.29 billion in Oct-Dec
* Dalmia Bharat Oct-Dec consol PAT falls 76.8% on year, sales down 11.7%
* CARE ups India Cements' long-term bank facilities rating to 'AAA' from 'BB+'

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 Noopur Bhandiwad
Edited by Ashish Shirke

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