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Informist, Friday, Jan. 09, 2025

MUMBAI – Most cement stocks are likely to trade in negative territory for most of the days in the upcoming week as brokerages see a weak December quarter for the cement companies due to pricing pressure during the quarter due to cut in goods and services tax. Analysts expect a negligible recovery in realisations during the reporting quarter despite a rise in volumes and that the companies are likely to see meaningful realisations only by April. This view of brokerages comes amid reports that cement companies will announce major price hikes in January. 

Last week Informist exclusively reported that cement prices are expected to rise in markets across south India Monday onwards as manufacturers gear up to recover part of their increased costs and cash in on the rising demand, multiple dealers and industry officials said. Southern states--Andhra Pradesh, Telangana, Tamil Nadu, and Karnataka--are expected to see a price hike of INR 20 to INR 30 per 50 kilogram bag, a senior official at a Hyderabad-based cement manufacturing company said on the condition of anonymity, adding that prices are seen stable in the northern and eastern regions.

"Overall, we expect EBITDA/tonne to jump by ~19% YoY but decline ~6% QoQ on the back of soft pricing, higher petcoke cost, and INR depreciation. The outliers in terms of EBITDA per tonne change are likely to be Ultratech Cement and JK Cement on the positive side and Prism Johnson on the negative side," Ravi Sodah of Elara Capital said in a report. 

Talking about the performance of companies in the December quarter, Nirmal Bang said that the sector remains structurally bullish but tactically mixed. Strong demand continues to support sustained volume growth, higher utilisation, and cost absorption benefits. However, elevated capacity additions are capping pricing power and limiting near-term earnings upside.

Shares of ACC are expected to trade in the red with support levels at INR 1,675 and resistance seen at 1,725, according to Anshul Jain, technical analyst at Laxmishree Investments and Securities. Resistance level for Shree Cement is seen at INR 27,400 and the support level is seen at INR 26,950, Jain said. Friday, Shree Cement ended at INR 26950, up 0.4% and ACC fell over 1%, closing at INR 1,705.80 on the NSE. Shares of UltraTech Cement fell over 1% at INR 11,937 on the National Stock Exchange. 

TOP HEADLINES

* Cement cos to up prices INR 20-INR 30 per 50 kg bag in south India mkts Mon

Following are the resistance and support levels for key cement stocks for next week as per calculations based on their prices on the National Stock Exchange:

End

Reported by P. Madhu Kumar

Edited by Deepshikha Bhardwaj

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