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Cement shares soar on govt's infra push; UltraTech, Shree Cement up 8%

The huge thrust on infrastructure spending by the government in the Budget 2021-22 bodes well for construction materials such as cement and steel

cement firms | Buzzing stocks | Budget 2021

SI Reporter  |  Mumbai 

construction, realty, workers, infra, jobs, migrants, labour, wage, real estate, concrete, cement, buildings, high rise

Shares of cement manufacturers were on a roll in Tuesday's session with sector giants UltraTech Cement, Shree Cement, Ambua Cements, Grasim Industries and ACC rising up to 8 per cent on the BSE as the Union Budget focussed on growth with a sharp increase in capital expenditure (capex) allocation.

The huge thrust on infrastructure spending by the government in the Budget 2021–22 bodes well for construction materials such as cement and steel. A higher allocation towards capital expenditure with a focus on roads, infra and railways can give a significant growth impetus to the economy, according to analysts.

“The government’s thrust on infrastructure spending and affordable housing bodes well for cement demand. We expect cement demand to remain flat in FY21, but grow 11 per cent year-on-year (YoY) in FY22 on the back of government spending on infrastructure and affordable housing. We prefer companies that are moving down the cost curve, have the potential to gain market share and provide valuation comfort,” Motilal Oswal Financial Services said.

Among the individual stocks, hit a record high of Rs 6,180, after rallying 8 per cent on the BSE. The stock surpassed its previous high of Rs 5,832 touched on January 25, 2021. With strong rural growth, revival in manufacturing sentiment, the buoyancy of GST and tax collections, UltraTech expects demand to grow on the back of the government’s push on infrastructure projects.

too hit a new high of Rs 26,500, up 8 per cent, trading above its previous high of Rs 25,980 touched on January 8. Grasim Industries and Ambuja Cements were up 7 per cent, while, ACC and The were up 6 per cent each on the BSE. In comparison, the S&P BSE Sensex was up 2.2 per cent at 49,668 points at 01:19 pm.

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First Published: Tue, February 02 2021. 13:48 IST