GOLDEN RULES FOR TRADING

Cement Stocks Outlook for the week – 02 to 06.02.2015

Cement Stocks Outlook for the week – 02 to 06.02.2015

Stocks of major cement companies are expected to trade with a positive bias next week, in
anticipation of a big push for the real estate and infrastructure sectors in the Union Budget.

Cement stocks have been rallying for post Reserve Bank of India's move of slashing key policy
rates earlier this month, and the momentum is seen continuing in the run-up to the Budget,
scheduled to be detailed on Feb 28.

Following the earlier 25 bps rate cut, the Budget is expected to introduce further reforms to boost
building in India, especially given the 'Make in India' focus--real estate, select infrastructure
companies, and consequently cement companies seen benefitting the most in the long-term.

Market will also keep an eye on the Oct-Dec earnings of ACC. ACC's Oct-Dec net profit at 1.99
bln rupees, down 28% year-on-year, while net sales is seen higher by 9% at 29.26 bln rupees.
The company is scheduled to detail its earnings for the quarter on Tuesday.

We expect, trade could be volatile on Tuesday but will recover later during the week, after the
market discount's ACC's earnings. Led by the busy season, we expect cement prices to rise in the
coming few months. With the expected pick up in cement demand, prices should be on the rise,
while cost is expected to be under control, thereby driving YoY growth in EBITDA (earnings before interest, tax, depreciation, and amortization)/tn.