Cement Stocks Outlook for the week – 14 to 18.12.2015
(Seen
gaining some ground on tribunal's ruling)
Shares
of cement companies are seen gaining ground in the week ahead,
snapping
days of fall, after the Competition Appellate Tribunal earlier today set
aside
the Competition Commission of India's 63-bln-rupee fine on 11 cement
manufacturers
in a 2012 case.
The
Competition Appellate Tribunal asked the competition regulator to
give
a fresh order within three months. The ruling led to brisk-buying
across
the cement and cement product space, with shares of cement
manufacturing
companies gaining as much as 5%.
CCI
had imposed penalties on cement-makers such as ACC, Ambuja Cement,
India
Cements and Shree Cement alleging cartilisation in cement dispatches
and
price hikes. The regulator had also penalised Ultratech Cements, Lafarge
India,
JK Cement, Ramco Cements, Century Cements, and Binani Cements.
The
companies were asked to cough up 50% of two years' profit at that time.
Even
as cement companies' shares are expected to rise on this ruling, demand
for
the product remains weak across markets in the country, with companies
cutting
prices in a bid to push sales.
This
subdued demand would cap the upside in share prices of cement
companies.
Weak demand continues to put pressure on cement prices,
especially
from the northern region, which has witnessed high volatility, with
prices declining by
25-30 rupees per bag.