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In the midst of an outcry on the need to increase infrastructure spending and reduce the interest rates to rev up the economy, the cement stocks had a dream run with at least five of them hitting their 52-week highs in the stock exchanges today after some cement companies announced higher production in January.
Fresh new highs again
Both ACC and Ambuja Cements touched fresh 52-week highs on Friday. Generally, the cement stocks witnessed hectic trading, with some of them registering very high volume, probably aided by their reasonable valuation.
Other cement stocks such as Mangalam Cement and India Cements also witnessed a sharp increase in their prices.
ACC, which touched a 52-week high of Rs 1,264.45 on Thursday, reached a new yearly high of Rs 1,275 before declining moderately to Rs 1,270 at the close with the volume of trading being 4.4 lakh shares in the NSE.
peers too
Ambuja Cements also reached a new high of Rs 173.20 on the day and the trading volume surged to about 32.01 lakh shares.
UltraTech Cement Ltd, which witnessed a trading volume of more than 3 lakh shares in the NSE, touched a 52-week high of Rs 1,280 before closing lower at Rs 1,271. Grasim, which also has significant cement manufacturing capacity, surged to a 52-week high of Rs 2,759, a gain of Rs 91.75. The trading volume was around 1.96 lakh shares.
Madras Cements was another stock to hit a 52-week high of Rs 131.40 with a trading volume of 12.75 lakh shares. The interest in the counter was sparked by the robust third quarter (Q3) performance of the company. The net sales shot up to Rs 741.04 crore in Q3 of current fiscal compared to Rs 579.21 crore in the same period last year and the net profit had recorded a sharp jump to Rs 76.84 crore (Rs 43.48 crore).
Mangalam Cement logged a gain of Rs 10.40 or 10.02 per cent to close at Rs 114.20 with about 1.30 lakh shares having been traded.
India Cements was next only to Ambuja Cements in terms of trading volume, with about 25.55 lakh shares being traded in the NSE. The stock closed at Rs 93.65, a gain of Rs 5.70. But its 52 week high of Rs 105 looked to be some distance away.
The Trigger
The interest in the cement companies has apparently been triggered by the good results posted by some of them or the strong sales performance in January. This has come in the backdrop of the recurring demand for increased spending in the infrastructure sector and the need for reducing the interest rates to rev up the demand for construction, particularly in the residential space.
Obviously, the strong cement prices in some of the key markets have helped the companies in improving both their topline and bottomline.
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