Cement Stocks Outlook: 30.07.2012 - 03.08.2012
Movement in stocks of major cement makers is likely to
be stock- specific next week as investors look at companies' Apr-Jun
earnings to take a view on the scrip. Ambuja Cements, which rose nearly 8%
this week after it posted a rock solid performance in Apr-Jun, may rise
more next week. Improved realisation, and high sales volumes took Ambuja
Cements' net profit for Apr-Jun up 35% year-on-year to 4.69 bln rupees,
marginally higher than Street expectations. The company's net sales rose
18% to 25.66 bln rupees. Stocks of ACC may also trade slightly up, reacting
to satisfactory earnings for the quarter, but the upside is likely to be
limited. The company posted a 26% on-year increase in net profit at 4.14
bln rupees on the back of a 15% rise in net sales at 29.19 bln rupees.
The current market price adequately factors the
improving sectoral outlook and ability of the company to capitalise on the
same. Jaiprakash Associates stocks, which fell over 10% this week on
expectations of poor Apr-Jun earnings, may see some more fall, but the same
will be capped. Jaiprakash Associates is seen posting an only 2% rise in
Apr-Jun net profit driven by realisations from its cement business. The
company will detail its quarterly earnings on Tuesday. Cement volume
(ex-Jaypee Cement Corp) is likely to be 4.3 mln tn; while blended
realisation is expected to rise 0.4% on year to 3,672 rupees per tonne.
Street is also likely to watch Andhra Cements' Apr-Jun earnings Wednesday,
Madras Cements' results on Thursday, and India Cements' numbers on Aug 13.
By RUPEE DESK [email protected]
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