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Cement stocks slumped as the Supreme Court had on Friday requested all States and Union Territories to move forward towards a nationwide ban on the use of pet coke and furnace oil to power up industries, in a bid to fight pollution.
Shree Cement Ltd shares slumped as much as 5.3 per cent, while JK Lakshmi Cement Ltd and J K Cement Ltd dropped as much as 5.2 per cent and 5 per cent, respectively.
“Companies like Shree Cement and JK Cement are largely dependent on pet coke, and the ban will have an impact on their EBITDA margins,” says Rohit Natarajan of IDBI Capital.
Other cement makers such as Ambuja Cement Ltd and UltraTech Cement Ltd were down 2.9 per cent and 2.2 per cent, respectively.
The Environment Bench of the Supreme Court had already ordered a ban on the industrial use of pet coke and furnace oil in Uttar Pradesh, Haryana and Rajasthan on October 24.
This ban specifically came after an Environment Pollution Control Authority Report recommended the ban on sale, distribution and use of furnace oil and pet coke in the National Capital Region. Their use is already prohibited in Delhi.
(With inputs from The Hindu and Reuters)
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