UltraTech, ACC, Ambuja, Shree Cement share prices decline up to 5% in a week. Should you Buy, Sell or Hold the stocks?
UltraTech Cement, ACC, Ambuja Cements, Shree Cement share price have remained volatile and down up to 5% during last one week. While the Cement stocks had seen sharp rally till February, it is the weakness in Cement prices that is one of the reasons attributed by analysts for volatility in share prices now.
The Cement prices during the March quarter (till 6th March) were down 6% compared to the the December quarter average, said analysts at Motilal Oswal Financial Services. It has been four consecutive months of cement price declines and Cement prices have declined in all regions though the decline was sharpest in South India.
Cement demand in certain pockets was impacted by regional headwinds (extreme winter, fog in the north, Pongal festival in the south, fiscal challenges in a few states of the east region, and farmer protests in Delhi-NCR and Punjab, said analysts. Also Read- Nifty 500 beats key global indices over last 10 years; midcap outperforms smallcap, largecap indices: Motilal Oswal AMC Overall though the fourth quarter is seasonally strong as construction activities start catching pace, the same has not been up to expectations .
Mangesh Bhadang, Research Analysts at Centrum Broking pointed out that the cement prices have been on a decline for last four months and demand has not picked up substantially. As a results the cement realisations as per Bhadang's estimates may decline 6-7% during the fourth quarter.
The fuel costs that have been on a decline for past few quarters, likely to provide some cushion in Q4 too. The cost of fuel usage (in ₹per Kilo Cal) decreased by around 13% for Shree Cement, 10% for Birla Corp, 5–6% sequentially for Dalmia Bharat, UltraTech, JK Cement , The Ramco Cements and 2% for India
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