Shares of cement
makers are in demand and trading higher by up to 5% on the bourses on hopes that the cement prices are likely to go up further in the post-monsoon quarters and on the back of a festive season.
UltraTech Cement, Ambuja Cements, JK Cement, ACC, Grasim Industries, India Cements and Ramco Cements are up 2-5% on the BSE as compared to 1.3% rise in benchmark index at 1125 hours.
All-India cement prices rose in September breaking the two-month downward trend after prices touched a yearly high of Rs 308 per bag in June. All major companies adopted aggressive price hike strategies, which led to prices rising by as much as by Rs 50-60/bag in certain markets from the monthly lows.
According to dealers, prices will continue to rise as demand recovery is expected in certain pockets, says analyst at ICICI Securities in a report dated September 30.
However, analyst expects the margins of the cement companies take a hit due to the player’s inability to fully pass on the hike in costs given the slowdown in demand.
Among the individual stocks, UltraTech Cement
has rallied 5.3% at Rs 1,909, followed by Ambuja Cements up 4% at Rs 187, ACC
and JK Cement are up 3% each at Rs 1,137 and Rs 193 respectively.