While the improved outlook for the cement sector has been in the news for some time, it has not exactly reflected in the buying-selling activity of investors with respect to large companies. While companies such as Grasim Industries, ACC, Ambuja Cements, Shree Cements, JK Cement and JK Lakshmi Cement saw less churn in shareholding pattern, smaller companies like The Ramco Cements, Prism Cement and Heidelberg Cement India in the March 2016 quarter witnessed high activity.

This is probably due to stock churning amid profit-booking among smaller companies, said analysts.

Heavy selling in Ramco

In the March quarter, the Nifty 500 index dropped 4.5 per cent, outperforming the benchmark that declined 2.8 per cent. UltraTech Cement is yet to announce their shareholding pattern.

Among smaller players, Ramco Cements witnessed heavy selling activity by both foreign and domestic institutional investors due to a sharp rise of 19 per cent in the stock price in the second half of FY16.

The stock gained a further 16 per cent in FY17 till date. Sharekhan recently downgraded the rating on the stock to ‘hold’ from ‘buy’. “We see pressure for south-based players in the immediate term,” it said. Heidelberg Cement India also saw selling by FIIs but the same got lapped up by DIIs while Prism Cement attracted FII buying interest.

“The disparity in regional price movements leaves lesser benefit for pan-India players in comparison to regional players based out of north and central India. The current price trends are more beneficial for players such as JK Lakshmi, JK Cement and Shree Cement from our coverage universe and Heidelberg and Prism Cement that also have a prominent presence in central India,” pointed out Kotak Institutional Equities in a preview report.

While there has been gradual improvement in demand (except South) and the cost scenario is favourable, prices have just started to improve and that too in certain pockets (north and central India), which saw substantial fall earlier.

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