Informist, Friday, Sep 13, 2024
MUMBAI – Shares of cement companies are seen in a narrow range next week after their gains this week. The continuing fall in cement prices since August is expected to cap further gains in these stocks, but the expectation of a recovery in prices owing to the probability of demand increasing after the monsoon and the festival season, will keep the current gains intact.
Cement prices decreased in August, eroding industry-wide profitability due to subdued demand in a seasonally weak quarter, Nuvama Institutional Equities said in a report this week. A price hike has been announced across India in the first week of September, an attempt to prevent realisations from slipping further, the brokerage said. However, the brokerage doesn't expect any substantial price hikes till Oct-Dec.
Though demand is expected to pick up this festive season, one should also take into account the erratic monsoon this season with heavy rainfall in some places, limiting demand, Narendra Solanki, head of fundamental research-investment services at Anand Rathi Share & Stock Brokers, said. A further upside in the stock will depend upon price hikes and volume take-off, which remains to be seen, Solanki said. However, the long term looks good structurally, according to him.
Kotak Institutional Equities, in a report today, said they see a case for higher profitability for the cement sector if cement prices were to hold up at current levels and crude oil prices were to stay at lower levels for a lengthy period of time. According to Kotak Equities, cement prices remained weak in the first half of the financial year owing to the general election followed by the monsoon.
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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 | 2517.45 | 3.60 | 2570.20 | 2426.90 |
| Ambuja Cements | 629.60 | 1.00 | 640.50 | 620.00 |
| India Cements | 367.05 | 1.00 | 371.50 | 361.00 |
| Shree Cement | 25883.10 | 1.10 | 26277.50 | 25617.50 |
| UltraTech Cement | 11717.95 | 2.50 | 11839.30 | 11564.50 |
| Nifty 50 | 25356.50 | 2.00 | 25497.90 | 25221.80 |
| S&P BSE Sensex | 82890.94 | 2.10 | 83318.70 | 82439.30 |
End
Reported by Noel John
Edited by Rajeev Pai
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