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Each passing day sees the stock of Shree Cement stock recording a new peak at the bourses.
On Tuesday too, the stock scaled a record high of Rs 4,539, but ended at Rs 4,450 on the BSE, one per cent lower than the previous day’s close on account of profit-taking.
According to analysts, capacity utilisation of most cement companies showed signs of revival.
Analysts said Shree Cement sells most of its produce in the northern region.
With no new major capacity addition coming up in the North, the company should benefit and would be able to pass on any increase in production cost.
Recently, Bank of Merrill-Lynch upgraded the stock from ‘neutral’ to ‘buy’ due to “visible bottoming of the industry’s capacity utilisation in FY13E.”
The foreign brokerage, which raised the price target to Rs 5,850, said: “Tightening industry supply-demand will drive up cement prices and Shree’s margins.
“Good location (North-based), strong management and healthy earnings growth will further drive up the stock.”
> suresh.iyengar@thehindu.co.in
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