Should you bet on these cement stocks?

Cement stocks have been in news lately. The shares of companies such as Ramco Cements, India Cements, UltraTech Cements, ACC, etc. were seen staging a recovery.

Everything turned upside down for the cement sector when the lockdown was implemented suddenly due to the COVID-19 pandemic, which eventually resulted in the halting of the construction activity and also, caused supply disruption. Even after the economy reopened, construction activities remained minimal due to the onset of monsoon, which also hampered the business demand for cement products.

With time, constructions at various sites have resumed and the cement industry demand is slowly improving on the back of pent-up demand in the economy post easing of lockdown restrictions. As a result, the sector witnessed a significant demand growth in the month of September 2020, rising by 20 per cent MoM and over 10 per cent YoY. While urban demand may remain subdued, rural demand and demand from government-led projects will further drive growth for cement companies.

Analysts believe that with volume recovery, cement companies should be able to post better results for Q2FY21. After brokerage firms reinstated confidence in the cement sector, investors are seen favouring cement stocks on the basis of a hopeful positive growth ahead.

Shares of Ambuja Cements, JK Cements, Sagar Cements, and ACC Ltd touched their respective 52-week highs on Tuesday. On Wednesday, the majority of the cement stocks continued gaining momentum while NCL industries made its fresh 52-week high of Rs 133.30 per share.

Following is the list of top-performing cement stocks since the beginning of October 2020: