Cement Stocks Jump; CLSA Says Worst Behind

Cement stocks jumped on Tuesday as the core sector data suggested a revival in the beleaguered cement sector.

Grasim Industries jumped over 4 per cent to Rs 3,630 whereas UltraTech Cement and Ambuja Cements were up around 3 per cent each.

The core sector index, which measures output of eight infrastructure industries, rose 2.7 per cent in the month of July, 2014. Although the growth was significantly lower than the growth reported in the month of June, but individual sectors like coal, cement and electricity reported strong growth in the month of July.

Production in the cement sector grew at 16.5 per cent year-on year in the month of July suggesting a revival in construction activities. This growth was fastest in last 32 months.

Asia Pacific focused brokerage CLSA says worst is behind the cement industry and green shoots of recovery seen in the sector. It expects strong recovery in the sector after 7 years of contraction.

Grasim Industries, ACC, UltraTech Cement and Shree Cements are the top pick of CLSA in the cement sector.