Here's the Breaking News: There has been sharp appreciation in Cement prices across India in last few months. The price hike has been the steepest in South India where prices have gone up by Rs. 70/bag. Well, this makes Cement companies an interesting Buy on Dalal Street.
But it seems - price hike has not gone down well with users. The Confederation of Real Estate Developers' Association(CREDAI) has asked for rollback in Cement prices in South India where price hike has been the steepest. CREDAI has warned that it's members will stop buying cement from June 30 onwards and if the price is not rolled back by July 7, the construction work would be stopped.
Well Cement Industry on other hand seems to be very upset with Railways. The Cement Manufacturers Association of India has asked the Railway Board to withdraw a 6.5% rise in freight rates on the basis that the cement industry cannot absorb the cost. Cement Industry is also very worried about poor Monsoon and it's impact on rural demand. Having said that - industry seems very optimistic on Govt spending on Infra.
Well, it looks like Cement Industry is getting its pricing power back and with Govt ready to spend huge money on infrastructure - investors will no doubt be looking at Cement companies with renewed interest.
What I covered on smarketpremium.com
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers