Country's cement sector to grow 7% in FY14: Credit Suisse

ACC and Ambuja its preferred picks

 

Indian cement sector is likely to grow with a rate of 7% in FY14, according to a report by global research firm Credit Suisse.

The report says that recovery should be driven by strong growth in rural housing and pick-up in roads and railways investment.

The resarch house expects accretive price increases for the cement sector in the current financial year as demand growth improves to 7% against 5% last year.

"Our bottom-up analysis suggests that demand growth from irrigation and power remains muted but roads and railways are still seeing double-digit growth," the report, which got released today, added.

According to it, rural housing growth stays strong and provides stability. "We expect rural housing demand to grow at 11%," it said.

The house prefers Ambuja Cements and ACC as its picks as they have strong balance sheets.

For Ambuja, it has given a target of Rs 205 while for ACC it stands at Rs 1,545.