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Given the strong demand and limited capacity addition in FY-07, analysts predict cement prices to further increase by Rs 3-5 per bag in the fourth quarter of FY-07.

Though despatches of the majors have shown a lacklustre performance in December with a 3.1-per cent year on year rise to 5.80 million tonnes, outlook on the cement sector remains positive.

Analysts reason that the transporters strike in November 2005, led to a spill over effect of despatches in December 2005 (base effect) resulting in subdued YoY growth in December 2006. The overall demand grew by 10 per cent during April-November 2006.

However, going forward, demand is expected to be buoyant and grow anywhere between 9-9.5 per cent YoY for FY07.The stock of Grasim ended at Rs 2,830, up 1.52 per cent, on the BSE. ACC ended at Rs 1,069.30, while GACL closed at Rs 141 on the BSE.

Deeptha Rajkumar

More Stories on : Stock Markets | Stocks | Cement | Ear to the ground | Cement

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