Cement Sector - First signs of seasonal up tick in prices n Emkay

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Cement Sector

First signs of seasonal up tick in prices

n     With monsoons coming to an end, cement producers hike prices in anticipation of demand pick up. All IndiaSept-11 cement prices improve by ~Rs4/bag m-o-m

n     Despite moderate demand, North (+Rs9/bag) & Central (+Rs12/bag) region see highest price hikes followed by Eastern region (Rs7/bag). Dealers expect further hikes 

n     Prices in western and southern region remain flat, except Gujarat where prices have seen a sharp cut of Rs10-15/bag. Southern manufacturers likely to roll back seasonal discount 

n     Though July-Aug dispatches grew +8% on low base, demand is yet to reflect strength. Solid demand pick up remains a key trigger to sustain the ensuing seasonal price uptick. Prefer ACC,SRCM & Grasim. Maintain REDUCE on ACEM & UTCEM.