Cement stocks in demand; UltraTech, ACC, Ambuja hit record high

JK Lakshmi, Mangalam Cement, India Cements, Orient Cement, Birla Corporation and Prism Cement up 3-12% on BSE.

Shares of cement manufacturers have surged with most of the frontline companies trading at their lifetime high on expectation of demand in the wake of Rs 70,000 crore additional investment in infrastructure proposed in the Budget.

UltraTech Cement (up 7% at Rs 3,350), ACC (4% at Rs 1,754) and Ambuja Cements (4% at Rs 283) have touched their respective all-time high price on the Bombay Stock Exchange (BSE).

JK Lakshmi Cement, Mangalam Cement, India Cements, Orient Cement, JK Cement, Birla Corporation, Grasim Industries, HeidelbergCement India and Prism Cement are up 3-12%. At 1329 hours, the benchmark S&P BSE Sensex was down 0.33% or 97 points at 29,264.

The government is committed towards housing for all by 2022. This will involve construction of 20 million houses in Urban India and 40 million houses in Rural India.

“This would be positive for the cement sector, as it is expected to boost cement demand from the housing segment. Higher rural allocation to translate into higher construction activity, thereby benefiting the cement sector on a whole”, Angel Broking said in a Union Budget 2015-16 Review.

According to analyst at Spark Capital, “the government proposal to provide an additional investment allowance (@15%) and additional depreciation (@15%) to new manufacturing units set-up during the period 01.04.2015 to 31.03.2020 in notified areas of Andhra Pradesh and Telangana should benefit the companies like UltraTech Cement, India Cements, Ramco Cements, Orient Cement and Dalmia Bharat.”