Analysts said investors are optimistic about their prospects given the lackluster performance of these stocks, however, expected government spending and price hikes will be a catalyst.
JK Cement rose 5.3% and Ultratech Cement rose 3.82% to emerge as the top gainers on the Nifty 50 on Monday. Dalmia India and Grasim Industries rose over 3% each, while Shree Cement and Ambuja Cement gained 2.77% and 1.32% respectively. .
“Cement stocks are consolidating and haven’t seen any major bounce in the last one or so years,” said Vikas Jain, head of research at Reliance Securities. “There was some rerating in stocks today due to a Jefferies report on positive price feedback.”
Cement prices were flat on month-on-month basis in November and the price decline appears to have bottomed out, brokerages said. The industry is looking at a price hike with a targeted ₹10-15/bag increase in December.
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“Demand growth improved modestly in October-November, and the recovery should continue in 4Q on recovery in government capital expenditure,” analysts at Jefferies said in a note.
Analysts said there is optimism for a recovery in the second half of FY25 and is buoyed by expectations of increased government spending in the infrastructure sector.
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