Cement shares gain; Ambuja Cements, Dalmia Bharat hit fresh 52-week high

A labourer loads cement bags onto an improvised motorized rickshaw at the construction site of a residential complex on the outskirts of Kolkata
Shares of cement companies were trading higher by up to 8% on the bourses on expectation of healthy growth in earnings for the quarter ended June 30, 2016 (Q1FY17).

Deccan Cements, HeidelbergCement India, Saurashtra Cement, Birla Corporation, India Cements, Sagar Cements, Prism Cement and Dalmia Bharat were up more than 2% each, while   ACC, UltraTech Cement, Ramco Cement, J K Lakshmi Cement and Orient Cement were up in the range of 1% to 2% on the Bombay Stock Exchange (BSE). At 01:27 AM, the S&P BSE Sensex was up 0.37% at 27,891.

UltraTech Cement was trading higher by an over 1% at Rs 3,559 on the BSE after the company reported a strong operational performance in Q1FY17. The company said Ebitda (earnings before interest, taxes, depreciation and amortisation) of Rs 1,573 crore for Indian operations, up 24% year-on-year, on account of higher sales volume and lower cost.

Analysts at Karvy Stock Broking expects aggregate revenues of 10 cement companies to increase by around 9% YoY, primarily led by around 10% volume growth as the average realisation has been flattish.

The brokerage firm maintain positive stance on cement sector as it believe that improvement in utilisations (led by demand pick-up & slowdown in supply additions) would help in pricing power.

“Going ahead, we expect the demand to pick-up during FY17-18E led by increase in government capex towards infrastructure (mainly Roads/Highways and Urban Infra) and pick-up in rural housing sector,” Karvy Stock Broking said in a Q1 results preview.

Ambuja Cements, Dalmia Bharat, HeidelbergCement India, J K Lakshmi Cement and Shree Cement were trading at their fresh 52-week highs on the BSE.


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