www.rupeedesk.inStocks of major
cement companies are likely to trade with a negative bias next week as demand
concerns remain on lack of any real pickup. According to the demand scenario is
a bit unclear, affecting the pricing power of cement companies. While there has
been some upward movement in prices in November, several similar attempts have
had to be rolled back.
For long, market has been expecting a turnaround
in the demand scenario post the monsoon season and as a countdown to the general
elections in mid-2014, but very little has happened on the ground both in
housing as well as infrastructure activity. We do not expect macro-recovery
theme to play out and see disappointment on expected election spends and good
monsoons. Cement producers will have to redraw growth strategy and expansion
plans.A declining trajectory of government spending is seen from the earlier
levels of around 15% to lower levels of 8-10%, and possibly even lower.