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Stocks of cements companies will stay in a narrow range with a weak bias next week as data on companies' despatches in November is expected to be bearish.In October, the combined despatches of seven cement companies that reported their volumes was 4.7 mln tn, up 7.6% from a year ago and 5.9% higher sequentially. These companies were ACC, India Cements, Dalmia Cement, JK Cement, OCL India, JK Lakshmi Cement, and Mangalam Cement.
ACC's cement despatches rose 3.5% from a year ago to 2.04 mln tn. In September, the company had sold 1.80 mln tn cement. Construction activity had slowed down due to labour shortage as there was a short gap between Diwali and Muharram. In the corresponding period last year, construction activity had jumped.
We expect low demand could force the companies to roll back the price hikes effected earlier this year. Prices have been under pressure due to demand weakness and year-end competition by multinational companies.
Shares of cement companies could find support at lower levels due to value buying by long-term investors. People are looking to invest in these stocks and that is why, you will see a bounce-up in these stocks. Stocks in the sector are expected to underperform the benchmark indices in the next couple of months.
Stocks of cements companies will stay in a narrow range with a weak bias next week as data on companies' despatches in November is expected to be bearish.In October, the combined despatches of seven cement companies that reported their volumes was 4.7 mln tn, up 7.6% from a year ago and 5.9% higher sequentially. These companies were ACC, India Cements, Dalmia Cement, JK Cement, OCL India, JK Lakshmi Cement, and Mangalam Cement.
ACC's cement despatches rose 3.5% from a year ago to 2.04 mln tn. In September, the company had sold 1.80 mln tn cement. Construction activity had slowed down due to labour shortage as there was a short gap between Diwali and Muharram. In the corresponding period last year, construction activity had jumped.
We expect low demand could force the companies to roll back the price hikes effected earlier this year. Prices have been under pressure due to demand weakness and year-end competition by multinational companies.
Shares of cement companies could find support at lower levels due to value buying by long-term investors. People are looking to invest in these stocks and that is why, you will see a bounce-up in these stocks. Stocks in the sector are expected to underperform the benchmark indices in the next couple of months.
