Cement Stocks Outlook for the week – 19 to 23.10.2015
UltraTech,
ACC Jul-Sep earning to guide stocks
( www.rupeedesk.in )
Trading
in stocks of major cement companies through the coming week would be influenced
by the Jul-Sep earnings posted by sector majors UltraTech Cement Ltd and ACC
Ltd. There will largely be a negative bias present, but the results of
UltraTech and ACC will guide stock movement during the week.
India's
largest cement manufacturer UltraTech is scheduled to detail its Jul-Sep
earnings Monday, while ACC will reveal its own set of numbers Tuesday.
UltraTech is seen reporting a consolidated net profit of 4.37 bln rupees for
Jul-Sep, up 5% on year, owing to higher volumes and a rise in operating profit
aided by easing input costs. The cement manufacturer's counter is seen as the
outperformer in the sector during the coming week unless it has any negative
surprises in its financial results.
The
country's largest cement-maker in terms of installed capacity is seen reporting
consolidated revenue of 56.09 bln rupees for the quarter ended September, down
2% year-on-year. ACC Ltd's consolidated net profit for Jul- Sep is seen down
35% on year at 1.26 bln rupees as weak prices are expected to hit realisations.
While the company has a pan-India presence, it has slightly better pricing
power in the northern, eastern and central parts of the country. As a result,
several analysts had a sideways outlook on the company's counter for the coming
week. The company's consolidated net sales are seen flat on year at 27.51 bln
rupees, weighed by a decline in volumes due to subdued demand.
Analysts
see the company's Jul-Sep volume at 5.5 mln tn as compared with 5.6 mln tn a
year ago owing to seasonal overhang and new entrants in the markets. Cement
companies typically see a weak quarter in Jul-Sep as monsoon keeps demand
subdued and this year the added hit of a slowdown in the infrastructure sector
has hurt the industry hard. In the short term beyond the coming week, analysts
gave a weak outlook on the cement sector, but hoped for things to start improving
by Nov-Dec.
