Cement Stocks Outlook for the week – 03 to 07.04.2017
Cement Stocks Outlook for the week – 03 to 07.04.2017
Stocks of cement companies are likely to rise next week as demand for cement is seen rising in 2017-18 (Apr-Mar). Demand for cement, which was hit by the government's decision to demonetise high-value currency notes in November, has been recovering steadily since mid-January as the availability of currency notes has improved. This has provided room for cement companies to raise prices.
Cement manufacturers have raised the prices by 5-30 rupees per bag since January. The impact of
demonetisation is almost over. We see demand improving next fiscal helped by infrastructure segment and affordable housing. Finance Minister Arun Jaitley had allocated a record 3.96 trln rupees to infrastructure in the Union Budget for 2017-18, up 10.5% from 2016-17. The Budget also accorded infrastructure status to affordable housing. This move is likely to boost real estate sector and improve cement demand. However, high cost of petroleum coke and diesel may drag cement companies' profit in the coming quarters. Prices of petroleum coke, which is widely used by cement companies as a fuel, had touched a high of 6,700 rupees per tn in November before falling marginally and stabilising. Diesel prices too rose 28% and 32% on year in January and February, respectively.
Source : Cogencis Information Services Ltd
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Cement Stocks Outlook for the week – 03 to 07.04.2017
Stocks of cement companies are likely to rise next week as demand for cement is seen rising in 2017-18 (Apr-Mar). Demand for cement, which was hit by the government's decision to demonetise high-value currency notes in November, has been recovering steadily since mid-January as the availability of currency notes has improved. This has provided room for cement companies to raise prices.
Cement manufacturers have raised the prices by 5-30 rupees per bag since January. The impact of
demonetisation is almost over. We see demand improving next fiscal helped by infrastructure segment and affordable housing. Finance Minister Arun Jaitley had allocated a record 3.96 trln rupees to infrastructure in the Union Budget for 2017-18, up 10.5% from 2016-17. The Budget also accorded infrastructure status to affordable housing. This move is likely to boost real estate sector and improve cement demand. However, high cost of petroleum coke and diesel may drag cement companies' profit in the coming quarters. Prices of petroleum coke, which is widely used by cement companies as a fuel, had touched a high of 6,700 rupees per tn in November before falling marginally and stabilising. Diesel prices too rose 28% and 32% on year in January and February, respectively.
Source : Cogencis Information Services Ltd
