Five cement stocks rose by between 3.41% to 6.86% at 14:30 IST on BSE on hopes of increased demand after finance minister Arun Jaitley announced many measures to provide fillip to infrastructure sector in Union Budget 2015-16.
Meanwhile, the BSE Sensex was up 46.89 points, or 0.16%, to 29,408.39.
Among cement stocks, ACC rose 3.91% to Rs 1,749, after hitting record high of Rs 1,754.25 in intraday trade.
Ambuja Cements rose 4.05% to Rs 282.45, after hitting record high of Rs 283.05 in intraday trade.
UltraTech Cement jumped 6.86% to Rs 3,352.55, after hitting record high of Rs 3,367.65 in intraday trade.
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Shree Cement rose 3.41%.
Grasim Industries rose 6.19% to Rs 3,991.95, after hitting 52-week high of Rs 4,004 in intraday trade. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Finance Minister Arun Jaitley in Union Budget 2015-16 announced on 28 February 2015, said an amount of Rs 22407 crore has been provided for housing and urban development for financial year ending 31 March 2016 (FY 2016). In the year 2022, on the occasion of 75th year of Independence the vision outlined for Team India led by Prime minister Narendra Modi includes housing for all consisting of 2 crore houses in Urban areas and 4 crore houses in rural areas. He proposed conversion of existing excise duty on petrol and diesel to the extent of Rs 4 per litre into road cess to fund investment.
The Finance Minister underlined the pressing need to increase public investment in infrastructure. He has proposed an increase in investment in infrastructure by Rs 70000 crore in the year 2015-16 over the year 2014-15 from the Centre's funds and resources of CPSEs. He said that he proposes increased outlays on both the roads and the gross budgetary support to the railways, by Rs 14031 crore and Rs 10050 crore respectively. He said the capital expenditure of the public sector units is expected to be Rs 317889 crore, an increase of approximately Rs 80844 crore over revised estimates for FY 2014-15. He also proposed to establish National Investment and Infrastructure Fund (NIIF) with an annual flow of Rs 20000 crore. He said that he also intends to permit tax free infrastructure bonds for the projects in the rail, road and irrigation sector. He said the PPP mode of infrastructure development has to be revisited and revitalized. Jaitley said the Government would also consider similar plug-and-play projects in other infrastructure projects such as roads, ports, raillines, airports etc. He also stated focus is on completing 100000 kilometers (km) of roads currently under construction plus sanctioning and building another 100000 km of road.
As per reports, the retail price of the building material is likely to go up in the range between Rs 15-20 per bag immediately. Tariff rate of excise duty in goods falling under Chapter sub-heading 2523 29 is being increased from Rs 900 per tonne to Rs 1,000 per tonne in the Budget 2015-16.
Meanwhile, Rail Budget announced on 26 February 2015, has hiked freight rates for cement by an average of 2.7% and Coal by 6.3%. The rise in prices of coal due to hike in freight rate could also increase input cost for cement makers.
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