More Stories

Informist, Friday, Feb. 2, 2025

MUMBAI – Price hikes will be the key trigger for cement stocks in the near term as companies are struggling to grow their earnings due to low product prices. Companies have announced price hikes this week to the tune of INR 5-INR 6 per bag, and the movement of stocks will depend on whether this price hike sustains, an analyst covering the cement sector at a domestic brokerage said.

If the price hike sustains, cement stocks may rise 3-4%, but if the price hikes are not absorbed, stocks may fall 5-7%, the analyst said. Sentiment around cement stocks is weak as the government last week reduced the estimate for capital expenditure this financial year to INR 10.18 trillion from INR 11.11 trillion budgeted last year. Further, the government had announced a 10% higher capital expenditure for the next year compared to revised estimates, which was below expectations.

Issues such as sand shortage, festival season, and monsoon are behind and labour availability is no longer a concern, Prabhudas Lilladher said in a sector report on Thursday. However, higher supplies and stiff competition pose new challenges, the brokerage said. With the expected surge in demand, prices could see a slight improvement, although intense competition is likely to prevent any significant price increase, it noted. As the government's infrastructure capital expenditure accelerates to meet the year-end target, Prabhudas expects pricing to remain stable, except in a few cities in the East and South regions.

Ramco Cement, Star Cement, and JK Lakshmi Cement announced their earnings during the week. The lack of any major uptick in cement prices led Elara Securities (India) to lower its earnings before interest, taxes, depreciation, and amortisation estimate for Ramco Cement by 6% for FY26 and by 4% for FY27. It stated sub-par demand, weak cement prices, and a sharp rise in fuel price as key risks to its view.

In contrast, Ramco Cement's capital expenditure is proceeding as planned and it is poised to benefit from government investments in infrastructure development, Nirmal Bang Equities said in a report. For Sagar Cements, demand is expected due to the recent acceleration in government infrastructure and housing projects, which will also support realisations, Geojit Financial Services said in a report. The company's consolidated net loss widened to INR 550.70 million for the December quarter. Geojit maintained an 'accumulate' rating on the stock considering the expected improvement in margins and recent correction in the stock price.

Among major earnings next week, Grasim Industries will detail its December quarter earnings Monday. The company is expected to report a net loss of INR 41.75 million on revenues of INR 81.72 billion for the December quarter, as per an average of four analyst estimates compiled by Informist. 

TOP HEADLINES
* Ramco Cements' Oct-Dec PAT rises over 3-fold on year to INR 3.25 billion
* JK Lakshmi Oct-Dec PAT falls 51.9% YoY, sales fall 13.4%
* Elm Park Fund sells 4.93% stake in India Cements under open offer
* Earnings Outlook: Grasim seen slipping into net loss amid paint ops loss
* UltraTech commissions additional grinding capacity at West Bengal unit
* Birla Corp Oct-Dec consol PAT falls over 71% YoY, sales down 2.3%

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 Akul Nishant Akhoury 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.