Cement Stocks Outlook for the week – 20 to 24.02.2017
Cement Stocks Outlook for the week – 20 to 24.02.2017
Stocks
of cement companies are seen moving up next week as adequate supply of
currency notes is likely to revive demand for cement. Cement demand had
taken a hit after the government outlawed high-value notes on Nov 8.
Dealers across the country were forced to cut prices by 10-15% to clear
inventories, raising fears about a sharp drop in the sector's
profitability. UltraTech Cement's comments that remonetisation will help
bring back the demand has cheered the market. Market will keep an eye
on results for Ambuja Cements, which is an important pan-India player.
Ambuja Cements Ltd is expected to report its financial results for
Oct-Dec on Feb 20. However, analysts are cautious on investors' optimism
on cement sector due to focus on affordable housing in the Union Budget
for 2017-18 (Apr-Mar) and don't expect it to last long. Affordable
housing was a big theme in the Budget. However, the trickle-down effect
will be felt only in the first quarter of 2018. The demand due to the
positive Budget won't reflect as soon as some of the investors are
expecting. Finance Minister Arun Jaitley had allocated a record 3.96
trln rupees for infrastructure sector in the Budget, up 10.5% from
2016-17. A host of measures for real estate sector, including according
infrastructure status to affordable housing. These measures are expected
to improve real estate sector and consequently the cement sector. ACC
Ltd and Ambuja Cements are also looking positive and will consolidate
next week.
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Cement Stocks Outlook for the week – 20 to 24.02.2017
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