Cement Stocks Up With Despatches

Share prices of leading cement companies rallied today following the announcement by the sector major Gujarat Ambuja Cements that the company's November despatches have increased 15.04 percent on a year-on-year basis.

The stock price of Gujarat Ambuja Cements, which is the first cement company to release November data, rose by around 5.5 per cent and later settled at Rs 186, up 2.88 per cent, on the Bombay Stock Exchange (BSE). It also raised hopes of improved performance by other key sector counterparts .

The Larsen & Toubro stock was up 3.29 per cent to close at Rs 212, while ACC was up 1.49 per cent at Rs 173.20. Grasim Industries, the third-biggest sector player, jumped 2.03 per cent to close at Rs 303.7.

According to analysts, firm cement prices coupled with improved sales are expected to boost earnings of the companies.

Gujarat Ambuja posted gains today on the back of a 15 per cent rise in despatches in November. The stock has been northward-bound in the last few weeks after most cement makers reported a sharp rise in cement despatches in October. This was owing to post-monsoon demand and a broad-based surge on the stock bourses.

From a low of Rs 140.30 on September 24, Gujarat Ambuja has jumped 34.4 per cent to the current level of Rs 188.60. The company's growth in despatches for November beats the expected 5-6 per cent growth in the sector during the period.

The most cost-efficient producer of cement in the country, Guajarat Ambuja reported strong first quarter results. The company posted a rise of 112.4 per cent in net profit to Rs 53.23 crore on a 21 per cent surge in net sales at Rs 255.19 crore. The growth in net profit was much above analysts' expectations. ===A capitalmarket.com poll of five cement analysts had estimated its net profit between Rs 41 crore and Rs 48.1 crore.