The shares of KCP Ltd surged more than 13 percent on June 7 after Telugu Desam Party (TDP) chief N Chandrababu Naidu’s return to power in Andhra Pradesh.
The stock of the Chennai-based company, which surged 12.93 percent on June 7 to close at Rs 248, had recorded gains of 13 percent on June 6 and 18 percent on June 5, following the announcement of both the Lok Sabha elections and the state assembly polls. TDP secured majority of seats in the assembly on its own by winning 135 out of 175, while it took away 16 of the 23 parliamentary constituencies in the state.
Market analysts believe Naidu coming back to power could put development of Amravati back on the table along with several of his dream projects. After Naidu lost power to his rival YS Jagan Mohan Reddy’s YSRCP, the state had three capitals, including Amravati. However, the market expects the focus to be back on Amravati as the only capital of the state. Naidu is likely to take oath as chief minister of the state on June 9.
Also read: TDP pledges to revive shelved Amaravati capital plan
The market is now betting on companies closely linked with Andhra Pradesh.
KCP is a key player in the cement and sugar industries. It is competing with several companies that have stake in Andhra Pradesh and Telangana, including UltraTech Cement, My Home Industries, Penna Cement, and India Cement.
In terms of size, KCP is relatively smaller compared to its rival present in the region, but most of their operations are in Andhra Pradesh and Telangana. It has a cement production capacity of 4.3 mtpa with limestone reserves, which could be used for expansion.
The company is valued at Rs 1.800 crore and has a market capitalisation of Rs 2,600 crore.
Moreover, traders are also excited about Ramco Cements, Sagar Cement and NCL, all of whom also have significant size of their operations around the above-mentioned region.
On June 7, Ramco Cements gained 5.5 percent to close the day at Rs 830 on NSE, while Sagar Cements rose 5.7 percent to end at Rs 240.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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