2 Cement Stocks Favoured by Dharmesh Shah of Emkay Global

In a monthly update report on cement sector, Dhrmesh Shah from Emkay global shared that there were two companies he favoured, UltraTech and Shree Cement.

Most of the report pointed out that there will be demand to uphold, along with price hikes would be the key monitorable. The marginal price hikes were seen across all regions, except the East, where they declined a tad month on month, in Feb-23.

He suggested that the industry volumes were up and YTDFY23 industry volumes have possibly clocked 11-12% growth YoY. Demand from the retail segment remains range-bound, while healthy traction in government-backed projects endures.

In the report he mentioned that, "We expect industry profitability to increase by Rs150-200/ton QoQ in Q4FY23, mainly led by input cost savings and higher operating leverage. International petcoke prices corrected by >35% from their peak (in Apr-22), to USD175/ton. Although sustenance of such prices would be challenging, given the volume push pressure owing to the year-end. For that reason, such attempts would primarily be for restricting any reversal in prices. However, any price-hike attempt in Apr/May-23 would be the key monitorable."

In terms of near term performance he stated that " Near-term stock performance is likely to be driven by spread between cement prices and input prices, in our view. Our medium-term upcycle thesis remains largely intact, albeit with a more gradual reset in profitability (RoIC), underpinned by improving demand-supply dynamics, better price discipline, cost optimization, and de-risking efforts. Key downside risks: Lower-than expected demand growth and any negative outcome from the CCI investigations.

In the end he suggested "We continue to favor UltraTech and Shree Cement among large caps."

The stock price of Ultratech Cement Limited is 7213.85 per share, it was down by 1.04% on intraday basis. Its 52-week high is at Rs 7,489 and 52-week low is at Rs 5,158 per share. In one yesr the stock price went up by 19.24%. The market capitalisation is Rs 2,08,251.29.

The stock price of Ultratech Cement Limited is 27,628.65 per share, it was down by 3.66% on intraday basis. Its 52-week high is at Rs 27,013 and 52-week low is at Rs 17,900 per share. In one yesr the stock price went up by 19.24%. The market capitalisation is 92,470.09.

Disclaimer:
The stocks have been picked from the brokerage report of Sharekhan. Greynium Information Technologies and the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.