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Stocks of domestic cement makers are seen firm next week as companies hiked the prices of the commodity earlier this week. Investors are likely to take cues also from the data on dispatches in December, scheduled to be released Tuesday. We maintain our view that the cement industry has gradually started to gear up for the cyclical upturn following improved fundamentals like narrowing demand-supply gap, sustained higher cement prices, rising capacity utilisation and moderation in cost inflation. We expects stocks of mid-cap companies to come in focus going forward. Stocks of cement companies may see some positive movement also as investors will start factoring in expectations that the companies' Oct-Dec earnings will be strong. Companies will detail their quarterly earnings beginning mid-January. With input costs stabilising somewhat, cement companies' realisations are expected to be higher in Oct-Dec. Also, companies raised cement prices after Jul-Sep, a seasonally weak quarter. Dispatches in Oct-Dec were higher sequentially. Ambuja Cements stocks are likely to remain in focus next week. Yesterday, Chief Executive Officer Ajay Kapur said the company is looking to set up a 5-mln-tn-per-annum integrated plant in Rajasthan. Ambuja Cements, the country's third largest cement maker by capacity, is awaiting approvals for the proposed plant, in which it would invest 20 bln rupees.
