HOME   
   NEWS   
   BUSINESS   
   CRICKET   
   SPORTS   
   MOVIES   
   NET GUIDE   
   SHOPPING   
   BLOGS  
   ASTROLOGY  
   MATCHMAKER  


Search:



The Web

Rediff








Business
Portfolio Tracker
Business News
Specials
Columns
Market Report
Mutual Funds
Interviews
Tutorials
Message Board
Stock Talk
Press Releases



Home > Business > Stock Market News > Hot Pursuits

Cement stocks on solid footing

June 09, 2003 14:08 IST

Cement stocks were the focus of trading in the first half today following improved dispatches recorded by cement makers in May 2003.

Afternoon trades saw Larsen & Toubro (up 3.89% to Rs 224.50), ACC (up 3.34% to Rs 153), GACL (up 0.49% to Rs 185.70) and Grasim Industries (up 0.45% to Rs 390), all making gains.

For May 2003, cement manufacturers reported an impressive 17.2% jump in cement dispatches to 10.56 million tonnes from 9.01 million tonnes in April 2003. Cement production during this period grew by 16.1% to 10.51 million tonnes from 9.05 million tonnes.

Production also increased 6.48% to 9.68 million tonnes from 9.87 million tonnes in May 2002. Dispatches rose 9.09% to 9.68 million tonnes.

The impressive surge in May 2003 production and dispatches is partly due to the relatively steep fall in April 2003. Large cement plants witnessed a 12.1% fall in dispatches to 9.01 million tonnes, while production fell by 11.6% to 9.05 million tonnes in April 2003.

Overall, the industry witnessed a modest 1.6% rise in dispatches to 19.57 million tonnes and 1.4% growth in production to 19.56 million tonnes in the two months ended May 2003.

Now dealers expect that the quarter ended 30 June 2003 will see strong performances by the cement sector as cement dispatches are improving accompanied by a simultaneous rise in prices.

In fact, players are already anticipating that post-monsoon demand will be upbeat on the reckoning that the monsoon this year will be adequate after drought-like conditions in many parts of the country last year.

Also, there's anticipation that cement makers will benefit from post war reconstruction work in Iraq. Reports reveal that cement majors like Gujarat Ambuja have already started receiving enquiries from cement importers in the Gulf region.

Cement makers located on the west coast of India are expected to gain ground as they are best suited to supply cement and clinker to Iraq for post-war reconstruction work. Companies like Gujarat Ambuja and Larsen & Toubro are major exporters of cement and clinker to the Gulf region and they already have an established import and distribution network in the region.

Analysts feel that the cement industry should witness stellar growth in volumes in the months to come following a sustained increase in construction activity. The thrust on infrastructure in the Union Budget will also boost cement demand further.

The Centre has proposed Rs 60,000 crore in infrastructure projects in the Union Budget. Demand continues to be driven by the Golden Quadrilateral road project and the sustained growth in housing construction activity.

However, despite the rise in dispatches, there's still concern over whether realisations will match the growth. Besides, the cement sector has been witnessing a supply overhang of late, which is expected to continue.

There is talk that Sanghi Industries will commence cement production shortly, strengthening the incidence of a supply overhang for at least the next three quarters.



Source: www.capitalmarket.com

Intra-Day Market Report



Article Tools

Email this Article

Printer-Friendly Format

Letter to the Editor



Related Stories


L&T scouts for cement firms

New twist to L&T cement demerger

Grasim Industries makes hay



People Who Read This Also Read


Trading strategy for June 9

Templeton MF declares dividend

ONGC signs pact with BPCL







HOME   
   NEWS   
   BUSINESS   
   CRICKET   
   SPORTS   
   MOVIES   
   NET GUIDE   
   SHOPPING   
   BLOGS  
   ASTROLOGY  
   MATCHMAKER  
© 2003 rediff.com India Limited. All Rights Reserved.