While there is general complaint of slowdown in investment in infrastructure projects, nine cement stocks hit fresh 52-week or life-time highs on the exchanges on Thursday.
Among the stocks that touched all-time high on the BSE were Ambuja Cements, RCC Cements, Shree Cement and UltraTech Cement, which is entering the Nifty index from Friday.
Even mid- and small-cap stocks such as JK Lakshmi Cement and Heidelberg Cement also made it to the gainers’ list.
Their stock performance did not appear to have been influenced by the market boom of the past few days after the Centre got into a reformist mood. Many of them had witnessed doubling of stock prices and in one case — JK Lakshmi — the price has nearly trebled in the last one year.
These stocks also witnessed strong trading volume implying that investors were willing to put their bet in these counters.
It was not only the standalone cement companies that had a good time.
Infra recovery to aid
Orient Paper & Industries, belonging to the CK Birla Group, touched a 52-week high of Rs 75. The stock has nearly doubled from its 52-week low of Rs 43.70 on December 20 last year.
The sharp rise in the price of cement stocks should be viewed in the context of the poor show put up by the infrastructure sector in general. If there is recovery in the infrastructure space, there might still be some steam left in these counters.
Emkay Global sees a large y-o-y realisation improvement (except in South).
“Cost pressures are expected to remain under control as truck freight hikes get negated by nine per cent y-o-y decline in international coal prices. Overall we could see marginal upgrades in earnings estimates for companies under our coverage,” the brokerage said.