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Stocks of cement manufacturers seen trading positive next week as demand for the commodity may rise going forward. Cement demand is seen getting a boost as the Bharatiya Janata Party won the elections in Gujarat, given the party's focus on growth and infrastructure development in the state. Gujarat accounts for 7-9% of all-India cement demand. We believe that the re-election of BJP (in Gujarat) will be positive for the infrastructure activities in the state and will drive the cement consumption in the state. The volumes of the western-based large cement players, like Ambuja Cements and UltraTech Cement, and small cement players, like JK Lakshmi Cement, Shree Cement and Jaypee Cement, are expected to increase. We sees large-cap companies--Ambuja Cements and UltraTech Cement--benefiting. In the mid-cap segment, we sees Shree Cement and JK Lakshmi Cement gaining from strong demand in Gujarat. Additionally, after the recent correction in cement prices that prices may not decline further. Demand is also likely to improve once industry enters into busy season. Thus, recent price corrections can be viewed as an opportunity for long term investors.
