The top picks which the brokerage is betting on from the sector are ACC, UltraTech and JK Cement
Cement companies are expected to report strong earnings growth in the last quarter of FY19 on the back of price hike and robust demand.
In fact, Emkay Global Financial Services expects volume growth for major cement companies such as UltraTech Cement, Shree Cement, Ramco Cements and JK Lakshmi Cement to be in the range of 9-12 percent each.
"Cement demand continues to remain strong, driven by government infrastructure projects and low-cost housing," it said. Cement production in India grew 9.5% YoY in Jan-Feb'19.
South-based companies may see earning upgrades as they announced price hikes of Rs 20-35/bag across the country in April . The sustenance of the announced price hikes would be a key trigger, the brokerage said.
Meanwhile, ACC's EBITDA growth is expected to be at 22.1% and Shree Cement's at 46.5%. India Cements and JK Cement are expected to report EBITDA growth of 40% YoY, each.
The top picks which the brokerage is betting on from the sector are ACC, UltraTech and JK Cement.
Broking house has also increased weights on UltraTech and Shree Cement, factoring in the strong Q4 results and the recent price hike announcements. It remains underweight on Ambuja Cements.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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