The Hindu Business Line : Price-cut talk weakens cement cos

Cement stocks have been witnessing steep fall in the last few days. According to market participants, following the Tamil Nadu Government’s warning last week that if the private cement factories did not bring down the prices, it would have no option but to take over their management, cement stocks, not only of Tamil Nadu companies but also from other regions, have been under selling pressure. Cement manufacturers in Tamil Nadu also met the Chief Minister and informed him that they would take a positive decision on reducing cement prices by January 10.

According to analysts, this will have repercussion in other States too forcing the manufacturers to cut the price. Market participants say that this also revived the memory of the period following last Union Budget, when the Finance Minister threatened to take tough measures to arrest soaring prices. Analysts tracking the sector said that the forthcoming Union Budget might not be conducive to the manufacturers since the soaring cement prices could not be arrested despite the government’s best intentions and efforts.

Grasim Industries fell 3.26 per cent, Ambuja Cements by 0.77 per cent, India Cements by 3.68 per cent, ACC 1.65 per cent, Binani Cement 2.41 per cent and Birla Cement fell by 1.5 per cent.

K.S. Badri Narayanan

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