Will monsoons wipeout cement stocks? Experts answer

Couple of cement stocks have been under pressure for last couple of days. The government is studying the companies whether they have some sort of cement cartelisation. In an interview with CNBC-TV18, Mohan Krishnaswamy, Head of Equity Research from RBS Equities (India) and Vinod Juneja, MD (Group) of Binani Cement gave their outlook on the cement and construction sector.

Below is the verbatim transcript of the video. Also watch the accompanying videos. Q: Reports say that the cement cartelisation is being looked at. Experts have been saying that it looks like there is an artificial inflation of cement prices. What would be your comment on that? Juneja: I totally disagree. As far as cartelisation is concerned in the cement industry, we as a company are not any part of cartelization or syndication. Cement is purely a commodity which has a demand and supply concept like any other industry. There has been a recent update where Union Environment Minister Jairam Ramesh has put an all India ban on taking out sand from river belt. Just like this, there is a new problem for cement everyday. Coal prices, energy prices and logistic are an issue. There is nowhere a question of cartelisation. Cement industry is not trying to rig up the price; instead they have been trying to give the best price available to various sectors like housing and infrastructure sector. As far as Binani Cement is concerned, we are producing about 93% of our capacity which is highest from last three years. Q: What is the current capacity utilisation? Juneja: Binani Cement