Cement Stocks Outlook: In 3-4% band next wk; more price hikes eyed
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Sukumar
Apr 5, 2008, 12:23:58 AM4/5/08
to Kences1
Cement Stocks Outlook: In 3-4% band next wk; more price hikes eyed
Friday, Apr 4
MUMBAI - Cement shares are seen moving in a narrow range of 3-4%
next week,but ruled out major movement on either side.
Shares of cement companies are unlikely to witness a significant
downside on hopes of more price hikes in the next few weeks following
rise in demand, and supply shortage in key markets.
However, concerns of likely price cap on key items by government
to curb inflation may limit major gains in these stocks.
Headline inflation for the week ended Mar 22 touched an over-three-
year high of 7%, and according to reports, government may impose price
ceilings on essential commodities to combat the price rise.
After weighing their options, cement companies late Tuesday had
raised retail prices by 5 rupees in Mumbai.
Currently, cement prices are hovering around 270 rupees per 50 kg
in Mumbai after all companies hiked prices here.
Further, cement companies are likely to hike prices by 3-5 rupees
per 50 kg in the northern and southern regions, and some parts of the
western region by Sunday.
Key markets have already started witnessing a shortage despite
companies operating at 100% utilisation level.
In Mumbai, a key market that consumes an average of 650,000 tn a
month,lead time between orders and dispatches has now risen to over
seven days,against an average of three-four days earlier.
STOCK VIEW
Our Technical analysts also expect cement stocks to move sideways
in a narrow range next week.
Shares of ACC are likely to face resistance at 875 rupees, with
good
support existing at 801 rupees, our technical analyst said.
ACC is likely to slip to 770 rupees if it breaches the support
level.
Ambuja Cements shares face resistance at 126 rupees, with good
support for the stock at 117 rupees.
The technical analyst added the stock has potential to touch 132
rupees if it manages to break 128 rupee-level with good volume.
Shares of Ultratech Cement is seen moving towards 880 rupees, but
only after breaching key resistance of 837 rupees,we said.
On any slide, Ultratech shares are likely to find support at 785
rupees.
Shares of India Cements shares are expected to face resistance at
201 rupees, with good support available near 171 rupees, Our Research
Team said.
Shares of Grasim Industries are likely to face resistance at 2,650
rupeesand find support at 2,420 rupees.
This week's closing prices, in rupees, of key cement shares on
National Stock Exchange, compared with the previous week:
Company Closing price Closing price %
Change
Apr 4 Mar 28
ACC 830.85 838.55
(-) 0.9%
Grasim Industries 2,543.75 2,704.65 (-)
5.9%
Ambuja Cements 119.15 123.70 (-) 3.7%
India Cements 182.90 194.00 (-)
5.7%
UltraTech Cement 805.85 784.80
2.7%
.
Sensex 15343.12 16371.29 (-) 6.3%
Nifty 4647.00 4942.00 (-)
6.0%
N.Sukumar
Research Analyst
www.kences1.blogspot.com
Friday, Apr 4
MUMBAI - Cement shares are seen moving in a narrow range of 3-4%
next week,but ruled out major movement on either side.
Shares of cement companies are unlikely to witness a significant
downside on hopes of more price hikes in the next few weeks following
rise in demand, and supply shortage in key markets.
However, concerns of likely price cap on key items by government
to curb inflation may limit major gains in these stocks.
Headline inflation for the week ended Mar 22 touched an over-three-
year high of 7%, and according to reports, government may impose price
ceilings on essential commodities to combat the price rise.
After weighing their options, cement companies late Tuesday had
raised retail prices by 5 rupees in Mumbai.
Currently, cement prices are hovering around 270 rupees per 50 kg
in Mumbai after all companies hiked prices here.
Further, cement companies are likely to hike prices by 3-5 rupees
per 50 kg in the northern and southern regions, and some parts of the
western region by Sunday.
Key markets have already started witnessing a shortage despite
companies operating at 100% utilisation level.
In Mumbai, a key market that consumes an average of 650,000 tn a
month,lead time between orders and dispatches has now risen to over
seven days,against an average of three-four days earlier.
STOCK VIEW
Our Technical analysts also expect cement stocks to move sideways
in a narrow range next week.
Shares of ACC are likely to face resistance at 875 rupees, with
good
support existing at 801 rupees, our technical analyst said.
ACC is likely to slip to 770 rupees if it breaches the support
level.
Ambuja Cements shares face resistance at 126 rupees, with good
support for the stock at 117 rupees.
The technical analyst added the stock has potential to touch 132
rupees if it manages to break 128 rupee-level with good volume.
Shares of Ultratech Cement is seen moving towards 880 rupees, but
only after breaching key resistance of 837 rupees,we said.
On any slide, Ultratech shares are likely to find support at 785
rupees.
Shares of India Cements shares are expected to face resistance at
201 rupees, with good support available near 171 rupees, Our Research
Team said.
Shares of Grasim Industries are likely to face resistance at 2,650
rupeesand find support at 2,420 rupees.
This week's closing prices, in rupees, of key cement shares on
National Stock Exchange, compared with the previous week:
Company Closing price Closing price %
Change
Apr 4 Mar 28
ACC 830.85 838.55
(-) 0.9%
Grasim Industries 2,543.75 2,704.65 (-)
5.9%
Ambuja Cements 119.15 123.70 (-) 3.7%
India Cements 182.90 194.00 (-)
5.7%
UltraTech Cement 805.85 784.80
2.7%
.
Sensex 15343.12 16371.29 (-) 6.3%
Nifty 4647.00 4942.00 (-)
6.0%
N.Sukumar
Research Analyst
www.kences1.blogspot.com
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