Cement shares firm up; ACC, Ambuja, UltraTech gain 3%

Saurashtra Cement zoomed 19% after reporting nearly seven-fold jump in net profit at Rs 16 crore for the quarter ended June 30, 2014.

Shares of cement companies are trading firm in otherwise volatile market on the Bombay Stock Exchange (BSE).

All frontline cement stocks - UltraTech Cement, ACC, Ambuja Cements, Ramco Cements, Grasim Industries and J K Lakshmi Cement are trading higher by up 3%, as compared to 0.40% decline in benchmark S&P BSE Sensex at 1400 hours.

Saurashtra Cement has zoomed 19% to Rs 44.30 after reporting a nearly six-fold jump in net profit at Rs 15.69 crore for the quarter ended June 30, 2014 (Q1), on back of strong realization. The company had profit of Rs 2.72 crore in the same quarter year ago. Net sales of the company grew 60% to Rs 163 crore from Rs 102 crore.

Meanwhile, the aggregate net profit of seven cement companies that have reported June quarter results so far, posted 11.5% year-on-year (yoy) growth in net profit at Rs 1,430 crore. The combined net sales of these companies grew 14.6% yoy at Rs 15,641 crore.

The management of cement companies expects construction activity to gather pace on the back of favourable announcements in the Budget for infrastructure and housing.

“Although macro-economic condition remains challenging, construction activity is expected to pick up pace considering favorable announcement in the Union Budget for infrastructure & housing,” says analyst at Motilal Oswal Securities.

Among the individual stocks, UltraTech Cement has surged 3.4% to Rs 2,553, followed by Ambuja Cements (Rs 210), JK Laksmi Cement (Rs 276) and ACC (Rs 1,412) are up 3% each on BSE.