Cement Stocks Outlook for the week – 06 to 10.02.2017
Cement Stocks Outlook for the week – 06 to 10.02.2017
Stocks of cement companies are seen rising next week as higher allocation for infrastructure, and measures to boost affordable housing announced by Finance Minister Arun Jaitley in his Budget speech on Feb 1 are seen positive for the sector. Jaitley allocated a record 3.96 trln rupees for the infrastructure sector in the Union Budget for 2017-18 (Apr-Mar). Additionally, he also accorded infrastructure status to affordable housing and said National Housing Bank will refinance individual housing loans of 200 bln rupees. These measures are expected to improve economic growth and revive the cement sector. Cement sector was badly hoping for measures to promote real estate and for more outlay for roads and other infrastructure projects. The Budget has not Disappointed and is expected to revive cement demand. Cement demand took a hit on the government's decision to demonetize high value currency notes on Nov 8. Dealers across the country were forced to undertake price cuts of 10-15% to clear inventories, leading to fears of a sharp decline in the sector's profitability. Some of the estimates of the hit to earnings were overstretched. The results of some of the companies have calmed those fears. While UltraTech Cement reported better-than-expected consolidated net profit of 5.95 bln rupees for Oct-Dec, India Cements posted an only 3% drop in sales.
Free Intraday Tips : Join Our Whatsapp No : 9841986753
Free Commodity Tips : Join our Whatsapp No : 9094047040
Cement Stocks Outlook for the week – 06 to 10.02.2017
Stocks of cement companies are seen rising next week as higher allocation for infrastructure, and measures to boost affordable housing announced by Finance Minister Arun Jaitley in his Budget speech on Feb 1 are seen positive for the sector. Jaitley allocated a record 3.96 trln rupees for the infrastructure sector in the Union Budget for 2017-18 (Apr-Mar). Additionally, he also accorded infrastructure status to affordable housing and said National Housing Bank will refinance individual housing loans of 200 bln rupees. These measures are expected to improve economic growth and revive the cement sector. Cement sector was badly hoping for measures to promote real estate and for more outlay for roads and other infrastructure projects. The Budget has not Disappointed and is expected to revive cement demand. Cement demand took a hit on the government's decision to demonetize high value currency notes on Nov 8. Dealers across the country were forced to undertake price cuts of 10-15% to clear inventories, leading to fears of a sharp decline in the sector's profitability. Some of the estimates of the hit to earnings were overstretched. The results of some of the companies have calmed those fears. While UltraTech Cement reported better-than-expected consolidated net profit of 5.95 bln rupees for Oct-Dec, India Cements posted an only 3% drop in sales.
