Shares of cement companies were trading higher by up to 7% on the BSE in noon deal on expectation of production recovery in October-December (Q3) quarter of FY17.
The frontline cement shares like ACC, Ambuja Cements, India Cements, UltraTech Cement and Shree Cement were up in the range of 1% to 4% at 01:35 PM; as compared to 0.06% rise in the S&P BSE Sensex. Sanghi Industries, Saurashtra Cement, NCL Industries, Mangalam Cement and KCP were up between 2% to 5% on BSE.
For the period April‘17 to July’17, the cement production has declined by 3.5% to 95.37 million tonnes vs 98.87 million tonnes during the same period last year.
Real estate and housing which constitutes two-third of the cement consumption has seen very low inventory addition as claimed by various industry sources.
CARE Ratings expects the same to persist as clarity on RERA implementation would continue to evolve during the coming quarters. The newly implemented Act (RERA) along with the regulations and compliances is making developers cautious.
The frontline cement shares like ACC, Ambuja Cements, India Cements, UltraTech Cement and Shree Cement were up in the range of 1% to 4% at 01:35 PM; as compared to 0.06% rise in the S&P BSE Sensex. Sanghi Industries, Saurashtra Cement, NCL Industries, Mangalam Cement and KCP were up between 2% to 5% on BSE.
For the period April‘17 to July’17, the cement production has declined by 3.5% to 95.37 million tonnes vs 98.87 million tonnes during the same period last year.
Real estate and housing which constitutes two-third of the cement consumption has seen very low inventory addition as claimed by various industry sources.
CARE Ratings expects the same to persist as clarity on RERA implementation would continue to evolve during the coming quarters. The newly implemented Act (RERA) along with the regulations and compliances is making developers cautious.
Infrastructure previously contributed for 13% of the total consumption in India. With increased Government spend and low activity in real estate, Infrastructure’s share in cement consumption would inch upwards of 15% during the current fiscal year. Roads and Public infrastructure development is expected to push the demand for cement in the two coming quarters, the rating agency said in cement sector update.
“We expect the cement production to remain subdued in the coming quarter. We see overall recovery starting Q3 FY17. Infrastructure project implementation, led by Smart City Projects across 60 cities and national highway projects would be major demand drivers in infrastructure segment. Implementation in the first batch of 20 smart cities has already taken off in stages, and for the remaining 40 smart cities chosen in September 2016, we expect the project implementation to begin Q3 FY17 onwards which should drive demand for cement,” it added.
“We expect the cement production to remain subdued in the coming quarter. We see overall recovery starting Q3 FY17. Infrastructure project implementation, led by Smart City Projects across 60 cities and national highway projects would be major demand drivers in infrastructure segment. Implementation in the first batch of 20 smart cities has already taken off in stages, and for the remaining 40 smart cities chosen in September 2016, we expect the project implementation to begin Q3 FY17 onwards which should drive demand for cement,” it added.
| COMPANY | LATEST | PREV CLOSE | GAIN(%) |
| ACC | 1652.45 | 1592.45 | 3.8 |
| AMBUJA CEM. | 268.50 | 261.65 | 2.6 |
| INDIA CEMENTS | 169.55 | 165.60 | 2.4 |
| ULTRATECH CEM. | 3846.75 | 3798.65 | 1.3 |
| SHREE CEMENT | 18166.35 | 17945.65 | 1.2 |
| PRISM CEMENT | 103.55 | 102.60 | 0.9 |
| JK LAKSHMI CEM. | 388.15 | 385.75 | 0.6 |