Cementing – a bond?
Cement Industry is one of the booming sectors in the Indian market. After China, India is second largest producer of cement. India has a lot of potential for evolution in infrastructure and construction sector. So cement sector will be largely witnessing a peak period of earnings.
According to rating agency ICRA, demand for cement is likely to rise by 6 per cent in current fiscal and further rise to 7 per cent in 2017-18. This rise will be observed due to pick up in Infrastructure segment (road and housing development) and smart cities projects.
On this tone, we have analysed cement companies' last one-month's performance. We have analysed 23 cement companies. According to last one month, we have picked up our top five performers from cement industry.
Industry- Cement Industry |
Company Name |
1M Return % |
Market Cap |
CMP |
Jaiprakash Associates Ltd. | 56.99 | 2157.59 | 8.55 |
The India Cements Ltd. | 22.43 | 3471.12 | 112 |
Gujarat Sidhee Cement Ltd. | 21.67 | 263.63 | 30.05 |
Sagar Cements Ltd. | 21.08 | 1188.91 | 683 |
KCP Ltd. | 19.41 | 1221.53 | 94 |
Our top five performers are- Jaiprakash Associates, The India Cements, Gujarat Sidhee Cement, Sagar Cements and KCP. In spite of poor financial performance in Q4FY16 results, Jaiprakash Associates has still managed to attract investors with 57 per cent of returns.
Our second ranker India Cements has rewarded investors with 22 per cent returns. Today on July 1, 2016 India Cements has attained its 52 week high of 114 on an intra-day basis, driven by a positive note from company's management and strong Q4FY16 financial numbers. As per company management, India cement aims for 9.6 MT plus sales in FY17.
Gujarat Sidhee Cement and Sagar Cements closely competed for the third slot and gave approximately 21% returns. On June 30, 2016, Sagar Cements reached its 52 week high of 719. This spike was due to acquisition of grinding unit at Andhra Pradesh.
KCP has rewarded investors with 19 per cent of returns in last one month. KCP also has on the cards expansion of its unit at Andhra Pradesh.
Rise in cement demand, capacity expansion and good financial performance has triggered the cement stocks and eventually rewarded investors handsomely.