Prabhat Awasthi bullish on cement space

Prabhat Awasthi, head of equity research & MD at India - Nomura Financial Advisory & Sec is bullish on cement space as stock prices have underperformed and elections might be positive for the sector.

Awasthi told CNBC-TV18, “We just turned overweight on cement this week or rather when we turned slightly more constructive in the market. We were underweight through the year so far. That call actually worked. Why we have gone overweight is because of one very simple reason that we believe that a lot of the slowdown in cement sector was largely driven by government spending slowdown. As we run into elections or closer to elections, I think there will be some pick up in spending which has been extremely tight especially in the second half of the year as the government tries to control fiscal deficit.”
“Lot of the burden of fiscal tightening fell in the second half and there might be some easing after the passage of financial bill. I think we have seen in the past, in years of election or years prior to election, usually government spending starts to pick up. So cement is a call primarily because of two reasons. One, the stock prices have underperformed and secondly, as I said, elections might be positive. If any sector benefits, it will probably be first the cement sector so that is why we are so bullish,” Awasthi added.