MUMBAI: Shares of cement companies rallied on Tuesday after sector major ACCNSE -1.13 % reported strong results for the quarter ended June with some witnessing their strongest gain in recent years. Analysts said ACC’s surge triggered a sentimental rally in these stocks.
ACC led the surge in the sector with a 13% gain to Rs 1,473.25 — its biggest one day rise since March 2001. India CementsNSE -2.43 %, Sagar CementsNSE -1.43 %. UltraTech CementNSE -2.60 % and Shree CementNSE -1.43 % jumped 3-9%.
“These stocks were beaten down on fall in volume and pricing pressure. In the June quarter some of the cement companies have surprised on volume and margins front. I believe the sector will outperform this year and ACC could touch ₹1,850,” said Sanjiv Bhasin, Executive VP-Markets and Corporate Affairs at IIFL.
Edelweiss expects the ongoing financial year to be a landmark year for the cement Industry on the back of robust volume with incremental demand emanating from the confluence of revival in affordable housing projects, rural demand and increased infrastructure spending by the government.
Even after the surge in Tuesday’s session, cement stocks are down for the year. ACC itself is down 15% so far in 2018. Mangalam Cement, India Cements, Sagar Cements, UltraTech Cement and Andhra CementNSE 0.00 % are down 3-38%. Prateek Kumar, analyst at Antique Stock Broking said the surge in cement stocks was primarily a rub off effect of ACC earnings.
“ACC has given strong performance in the quarterly results which had a rub off effect on the other companies in the sector. However sustenance would depend on how the results for other companies are in the space,” said Kumar.
