This Radhakishan Damani-owned stock hits over 13-yr high on robust outlook

India’s cement demand is on the path to recovery, but local lockdowns have made it erratic.
Shares of India Cement rallied 11 per cent to Rs 221.80, hitting an over 13-year high on the BSE on Thursday, on the back of heavy volumes. The stock of the cement & cement products manufacturer was trading at its highest level since February 2008. It surpassed its previous high of Rs 210.90, touched on May 24, 2021.

At 12:33 pm, the stock was quoting 9 per cent higher at Rs 217.80 on the BSE, as compared to a 0.59 per cent rise in the S&P BSE Sensex. Trading volumes on the counter jumped an over three-fold with a combined 18.38 million equity shares having changed hands on the NSE and BSE till the time of witing of this report. The stock trades in the futures & option (F&O) segment, which has no circuit limits.

The retail tycoon Radhakishan Damani and his family collectively held 21.14 per cent stake in India Cements as on June 30, 2021. In February 2020, Gopikishan Shivkishan Damani, along Radhakishan Shivkishan Damani, had together acquired 22.52 million equity shares or 7.27 per cent stake of India Cements at average price of Rs 95.97 per share via open market purchases. They later increased their stake above 20 per cent in the company.

As of June 30, 2021, Radhakishan Damani held 11.34 per cent stake in India Cements. Gopikishan Damani held 8.46 per cent, while Radhakishan Damani and Gopikishan Damani combined held 1.34 per cent stake in the company, shareholding pattern data shows.

Commenting on outlook, India Cements said in the financial year 2020-21 (FY21) annual report that the new Government in Tamil Nadu is expected to give push to housing and infrastructure development. "Further, Andhra Pradesh and Telangana Governments have started implementing irrigation, road building and other infrastructure projects and new housing schemes. All these developments give room for cautious optimism for cement demand in the coming months," the company said.

Meanwhile, the all-India cement production during the 5M FY2022 (April-August) has increased to 142 million MT and is higher by 44 per cent on Y-o-Y basis; and by 2 per cent when compared to pre-covid levels (5M FY2020).

Based on the trends so far, rating agency ICRA expects all-India cement production to report an increase by around 12 per cent to 332 million MT in FY2022 which will be supported by the pent-up demand, rural housing demand and the pickup in infrastructure activity. In FY2023, the production is expected to grow by 8 per cent to around 358 million MT.

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