Cement shares extend rally; Deccan Cements, Mangalam Cement hit new high

STOCK MARKET - Shares of cement companies were trading higher for the second straight day on expectation of increase in demand on the back of pick up in the affordable and rural housing segments.

Prism Cement, Deccan Cements, Orient Cement, Panyam Cement and Gujarat Sidhee Cement were up in the range of 5% to 12%, while Star Cement, India Cements, HeidelbergCement India, Sanghi Industries and Shree Cement up 2% to 4% on BSE on Friday. On comparison, the S&P BSE Sensex was up 0.44% at 34,118 at 11:19 AM;

Deccan Cements, Mangalam Cement, Prism Cement, Sanghi Industries, Star Cement and NCL Industries have hit their respective record highs on BSE.

ICRA projects demand growth for 2018-19 to marginally increase to 4-5%. This is primarily on the back of pick up in the affordable and rural housing segments.

However, the sector might face pressure on its profitability, given the rising costs of input materials and muted capacity utilisation levels, which are seen hovering around 65%.

According to a report by ICRA Ratings, cement makers have witnessed rising energy and freight costs on the back of higher prices of pet-coke, coal and diesel during the first half (H1) of 2017-18, the Business Standard reported.

Analysts at Antique Stock Broking strongly believe pickup in price trend would be similar this year as well led by improved visibility of demand and better utilisations.