InvestorQ : Why did cement companies like Ultratech, Ambuja and Ramco perform so well in the last few weeks in the stock markets?
Mahima Roy made post

Why did cement companies like Ultratech, Ambuja and Ramco perform so well in the last few weeks in the stock markets?

Answer
image
5 months ago
Follow

Cement stocks have been in the limelight for some time now on demand story building up. The real test came on Thursday 04 March when on a day when the overall markets were subdued, cement shares attracted a lot of buying interest. In fact, you could see stocks like UltraTech, Ambuja and Ramco Cement hitting their 52-week highs on reports of a rapid spurt in demand for cement from the infrastructure space and housing space.

These large companies were not alone. The trend was visible across other cement companies too. For example, cement companies like Orient Cements and India Cements also scaled yearly highs. If you look at most of the leading cement companies including ACC, UltraTech and Shree Cements, all these names were up between 3% to 5% on Thursday.

The reasons are not too far to seek. Most cement companies in India have seen cement price hikes to the tune of Rs.20-30/bag in the month of February. This is more pronounced in the South and Eastern region while the price rise has been much smaller in other regions. The price hike should be good enough to absorb the spike in the cost of inputs like petcoke, coal and diesel. All these prices are up sharply in the recent past.

The cement demand volumes in the Mar-21 quarter are expected to grow 20% on a yoy basis. Apart from infrastructure demand which has been around for some time now, a pick-up in real estate activity is also boost cement demand. That could be the icing on the cake.

0 Views