What should investors do with cement stocks? Sanjay H Parekh answers

economictimes.indiatimes.com:

«While it is not cheap now, there valuations are rich now, but I think you need to hold on to such quality stocks where the growth is going to be very aggressive and the management is really on top of it on all multiple fronts,» says Sanjay H Parekh, Sohum Asset Managers.

What are your thoughts on the entire cement space? I see two biggest names in your portfolio, Ambuja and Grasim. But one is turning an acquirer in order to reach their massive goals they have set for themselves five-seven years ahead on the capacity addition front, obviously that cannot come completely organic. So, inorganic route has to be taken. The other one has beyond cement, a positive on Vodafone resurrecting, going towards jewellery and other stuff. So, is it the cement you are kind of playing there or what exactly is the plan?
Sanjay H Parekh: One is cement in the near term may be weak for this quarter because first two months were weak. June has been better. But overall, structurally, with this emphasis on infrastructure, the large players very clearly will be beneficiaries, they will be acquirers.

So, we participated through Ambuja as they are very aggressive on acquisitions and they are doing it very smartly. They are not overpaying for it. And then the cost lever with all the synergies of the group, they are going to significantly better it.

Unlock Leadership Excellence with a Range of CXO Courses