Cement companies rose 1-6% on April 1 on expectations of a price hike. BofAML said in a report that cement companies communicated to dealers of a major price hike from April 1.
The price hike which was taken in March was rolled back within 10 days. The net increase in price is Rs 30-40/bag as compared to December 2018 prices.
Prices are likely to increase by Rs 20/bag across South India from April 1, said the report.
India Cement rose over 6 percent, followed by The Ramco Cement gained 3 percent, and Ambuja Cements rose 3 percent. Sagar Cement and Shree Cement rose 1-2 percent respectively.
Heidelberg Cement which rallied over 5 percent in morning trade hit a fresh 52-week high of Rs 191.60.
India’s cement industry saw a 13.6 percent year-on-year increase in volume to 275.7 million metric tonnes in the first ten months of the current fiscal, driven largely by rural and affordable housing, according to a report by credit rating agency ICRA.
The growth was almost double the 7 percent increase forecast by the agency.
ICRA expects volume growth of 8 percent for FY20 driven largely by rural and affordable housing demand and improved focus on infrastructure segments—mainly road, metro and irrigation projects.
Analysts also encourage investors to look at cement and capital goods segment which should outperform in FY20.
“Cement and capital goods segment should outperform in FY20 as capex cycle is expected to improve,” Vineeta Sharma, Head of Research, Narnolia Financial Advisors told Moneycontrol.
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