Shares of cement companies hit a new high
Shares of cement companies were trading higher by up to 12% after reporting a good set of numbers for the quarter ended March 2017 (Q4FY17). OCL India, Dalmia Bharat, Sanghi Industries, HeidelbergCement India and Shree Cement were up in the range of 3% to 12%, while ACC, UltraTech Cement and Ambuja Cements up 1% each on BSE. On comparison, the S&P BSE Sensex was up 0.31% at 30,341 at 12:35 pm. Dalmia Bharat, JK Cements, OCL India and Shree Cement have hit their respective all-time highs on BSE in intra-day trade. Dalmia Bharat soared 8% to Rs 2,570 after the company reported 94% jump in its consolidated net profit at Rs 184 crore in Q4FY17. It had profit of Rs 95 crore in the same quarter last fiscal. Earnings before interest, tax, depreciation and amortization (EBITDA) margin however declined to 25.2% from 27% in previous year quarter. The company expects cement demand to follow an upward trajectory due to concerted efforts by the Central Government on infrastructure development and affordable housing. The industry expects to witness less capacity additions in future due to increased entry barriers. UltraTech Cement was trading 1% higher at Rs 4,427, trading close to its record high of Rs 4,455 touched on Wednesday. Since April 21, post Q4 results, the stock outperformed the market by gaining 12% against 3% rise in the benchmark index. The company had reported 20% quarter-on-quarter growth in sales volume in Q4FY17 quarter, due to low base, demand recovery and capacity additions. “We continue to like UltraTech Cement on account of its prudent capacity increase driven volume growth, and consistent cost improvement and hence, we recommend accumulating on dips,” said analyst at Centrum Broking in result update and maintain ‘hold’ rating on the stock.
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