Near-term gains unlikely for cement stocks

A recovery in prices in the past couple of months has provided strong support to cement stocks. The share prices of select cement companies have gained 12-34 per cent in 2019 so far, outpacing an 8 per cent rise in the Sensex. However, concerns over realisations and high valuations could limit gains in the near term. Channel checks by some research firms indicate that the pan-Indian average cement prices have fallen 1-2 per cent month-on-month in June. According to a CLSA report, higher price discounts and rebates were observed in mid-May amid weaker demand.