Ambuja, ACC, UltraTech up after Citi upgrade

Bank says it sees a potential for 20-40% rise in the share prices of the three companies

Shares in cement producers rose after Citigroup upgraded Ambuja Cements, ACC and UltraTech Cement to buy from sell, citing better demand-supply equation and as new plants are more difficult to build.

The US bank said it saw a potential for 20-40% rise in the share prices of the three companies on the back of rising profits.

"The demand supply gap should narrow in favour of producers," it said in a report to clients. "We feel the worst is over."

At noon, shares in Ambuja Cements were up 2.28%, ACC rose 1.05% and UltraTech was up 0.41%.

Citigroup said likely government intervention to control prices and the companies' inability to pass on cost increases were risks to its forecast.