Cement stocks
outlook for the week – 24 to 28.11.2014
( www.rupeedesk.in )
Stocks of cement companies are likely
to be range bound next week as demand is still to recover
from the low hit during the
festival season and as prices of the commodity have decreased,
especially in the south due to
cyclone Hudhud.
Construction activity is
generally low during the festival season because of non-availability of
labour. Though prices and demand
are expected to recover, we do expect some correction in
cement prices during the month of
December due to inventory clearance by players like ACC,
Ambuja Cement. Thus any weakness
during that time should be used to buy attractively
valued stocks.
Cement prices have decreased by
10-15 rupees per bag during Oct-Nov in the north, in the west
prices were down by 10-12 rupees per
bag and in the eastern region the prices were largely flat.
Cement demand growth has started
reviving during 2014-15 (Apr-Mar) and demand is seen
growing at a compounded annual
growth rate of 9.2% between 2014 and 2016, led by increased
infrastructure spend, rural
spending as well as revival in housing segment. Pace of capacity
additions has slowed down and
thus capacity utilisation is expected to improve from the current levels going forward.
