Indian Cement stocks have taken a heavy beating in June with the onset of monsoons. Industry majors such as Gujarat Ambuja, ACC and Grasim Industries have plunged up to 15 per cent on the bourses in June so far. Market players have been off-loading these stocks with both cement prices and dispatches showing a declining trend, brokers said.
According to a Delhi-based industry analyst: “Slowdown in construction activity during the monsoons is a major reason for the decline in dispatches of cement. Prices have also come under pressure in June, especially in the western and southern region as a result of the decline in demand.”
Latest data from Cement Manufacturers Association (CMA) suggest that the production and dispatches have been lower in May 2004 as compared to the corresponding period last year. Dispatches have also declined in May 2004 as against April 2004. Market sources also said the onset of monsoons and decline in prices and dispatch figures have taken a toll on these stocks. “Historically, cement stocks remain under pressure during the rainy season and start looking up only after the demand starts rising after the monsoon. However, this time the general weakness in the markets ahead of the Budget has also weighed down the cement sector stocks,” broking sources said.
