Shares of cement manufacturers were in demand with many of the sector stocks trading higher in the range of 2 per cent to 6 per cent on the expectation of improved demand. Analysts expect the cement industry to witness positive growth in the second one half (October-March) of the present fiscal (H2FY21) led by strong demand from the sustainable rural business segment.
ACC rallied 6 per cent to hit a fresh 52-week high of Rs 1,670 on the BSE in the intra-day business. The inventory surpassed its preceding high of Rs 1,637, hit on October 22, 2020.
Shree Cement, too, surged 6 per cent, while Ambuja Cements, UltraTech Cement, Ramco Cements, Mangalam Cement, and Shree Digvijay Cement were up in the range of 2 per cent to 4 per cent on the BSE. In comparison, the S&P BSE Sensex used to be up 0.63 per cent at 40,397 points at 01:14 pm.
“The cement demand is strong led by rural retail which is led by a good monsoon. More than 50 per cent of rural districts have shown growth over their past few performances. This uptick in demand isn’t pent up demand as ascribed first of all. Urban demand may be coming back slowly. New capacity addition will slow down as very few limestone mines are to be had. Key drivers of demand are rural housing and infra,” said Dolat Capital in a recent outline.
For the July-September quarter, the sector giants UltraTech Cement and ACC reported strong operational performance. UltratTech’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin improved to 27.7 per cent from 21.8 per cent. EBITDA/tonne improved 30 per cent year-on-year because of advantage of cost rationalisation initiatives taken by the company in the preceding quarter. Analysts had expected EBITDA/tonne to enhance to 23.5 per cent YoY all over the quarter.
UltraTech expects demand for cement to grow on the back of the government’s thrust on infrastructure and the expanding rural economy. The recent policy measures announced by the Reserve Bank of India to strengthen the real estate sector will also aid demand, it said.
Analysts at Emkay Global Financial Services and products remain constructive on the sector as they expect clinker utilisation to enhance gradually. Though there was cost inflation in the first half i.e. April-September period (H1FY21), the brokerage firm believes that price hikes and volume improvement will help companies enhance profits.
Trade Standard has at all times strived tough to supply up-to-date information and statement on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and fixed feedback on how to enhance our offering have only made our get to the bottom of and commitment to these ideals stronger. Even all over these difficult times arising out of Covid-19, we continue to remain dedicated to keeping you informed and up to date with credible news, authoritative views and incisive statement on topical issues of relevance.
We, then again, have a request.
As we battle the economic affect of the pandemic, we need your strengthen even more, in order that we will be able to continue to provide you with more quality satisfied. Our subscription mannequin has seen an encouraging response from many of you, who have subscribed to our online satisfied. More subscription to our online satisfied can only help us achieve the goals of offering you even better and more applicable satisfied. We consider in free, reasonable and credible journalism. Your strengthen through more subscriptions can help us practise the journalism to which we are dedicated.
Strengthen quality journalism and subscribe to Trade Standard.