Among the individual stocks, Jaiprakash Associates was down 3% at Rs 11.31 on the BSE. JK Cement, Ambuja Cement, ACC, UltraTech Cement, Ramco Cements, India Cements, Shree Cement and Ambuja Cements were down 1%-2% on the BSE, as compared to 0.17% rise in the S&P BSE Sensex at 09:25 am.
Most of the cement stocks hit their respective multi-year highs and outperformed the market till yesterday after reported a strong set of numbers for the quarter ended June 30, 2016 (Q1FY17).
While it is a negative development for the cement companies, they also have a legal recourse and can appeal at higher courts for that. Further the matter had been lingering for many years but there has been no direct impact on the pricing by the cement companies, Angel Broking said in a client note.
While there could be knee jerk reaction to the names involved, some of the cement companies are having strong balance sheet which can pay the penalty without getting impacted in a big way. While there are few names which have a stretched balance sheet and any further cash outflow could impact their profitability in the near term, it added.
Meanwhile, Dalmia Bharat up 1% at Rs 1,677, hit a fresh record high of Rs 1,700 on the BSE in intra-day on Thursday.