IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, in a recent report on the Cement sector said prices had declined by Rs.5-20 per bag over the past two weeks in the northern, central and eastern regions with the onset of the winter and MNC producers offering discounts to boost volumes.
According to the dealers, demand has turned sluggish in the past two weeks due to reduced labour availability owing to the harvesting season and tightness in availability of finance due to the economic slowdown, the report said.
“We upgrade FY12 earnings estimates for companies in our coverage universe by 3-18% despite recent softness in cement prices as price declines have been lower than our estimates. We expect muted dispatch growth for the industry in December after strong growth in November dispatches of 19% YoY,” IIFL said.
IIFL sees cement prices increasing Jan 2012 onwards with the start of peak construction season.
The report was published by IIFL’s Institutional Equities Research desk.