Cement Stocks Outlook for the week (13-17.08.2012)

[rupeedesk]

Cement Stocks Outlook for the week (13-17.08.2012)

Stocks of major cement companies are seen rangebound with a positive bias next week as demand for cement remains better than expected due to a deficient monsoon. Sentiment for the sector also remains positive after most cement manufacturers posted strong numbers for Apr-Jun earlier this month. We believe that the worst is behind for the cement industry.

After the recent outperformance, cement stocks are trading at historical average valuations, leaving limited room for further re-rating. We expect strong earnings growth to drive stock performance, hereon. Ambuja Cements and UltraTech Cement are the top picks in the large-cap and while Shree Cement is its favoured stock in the mid-cap.

Next week, India Cements will be in focus as the company will report its Apr-Jun earnings on Monday. This week, stocks of the company fell 1.6% to 85.60 rupees. Stocks of Shree Cement will be eyed, as the company will announce its Apr-Jun earnings on Thursday. This week, the company's stocks rose 2.4% to 3,181.70 rupees.

By RUPEE DESK

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