The Ramco, India Cements, Andhra Cements, Sagar Cement share price declined 5-26% in a month. Buy, Sell or Hold?

The Ramco Cements, Andhra Cements , India Cements, Sagar Cement have seen their share price decline 5.8-26% in last one month. Analysts attribute this to the sharp fall in cement prices. 

Though Cement prices have been declining of flat in other regions of the country too, South India has seen sharpest decline.

Analysts at  Motilal Oswal Financial Services Ltd said that "Regionally, the South region witnessed the highest decline of Rs10 per 50 Kg bag (down 3% month on month) in February'2023 as price dropped across its key markets.

As Per Elara Securities India Pvt Ltd also South India saw the highest price cut of ₹13 per bag, followed by ₹8 per bag in East India, ₹6 per bag in North India, ₹5 per bag in West India and ₹3 per bag in Central India

Also Read- Suzlon Energy stock snaps 5-day losing streak, gains over 4.5% on securing new wind power project

Not surprising the investor sentiments have weakened even as the Cement demand remains strong.  

The input costs also have seen some surge which is adding to concerns.

Fuel prices (both petcoke and imported coal) have increased in the last week  of February and March ’2024 beginning. Spot prices for imported petcoke (US) and coal (South African) are up ~8% (each) month on month to $123 a tonne  and $ 101 a tonne, respectively, s per MOFSL Data. At spot prices, consumption costs stood at ₹1.46/Kilo calories for imported Petcoke and ₹1.50/Kcal for imported coal.

Some rise in costs may put pressure on profitability as we move forward, though the input cost trend will be watched keenly.

As price improvement or sustenance in March will be watched for, the strong demand however remains positive for volumes said analysts. 

Some analysts also feel that Volume push in March may overshadow price hike efforts. 

Meanwhile amongst the stocks Sagar Cement remains pick of many analysts.

Also read- SpiceJet share price jumps 5% after resolution of ₹413 crore dispute. Do you own?

Analysts at Systematix Shares and Stocks say that prices have been tepid ahead of general elections, companies with cost control have emerged as outperformers.

Ultratech, ACC, and Sagar Cements are  top picks of Systematix within the coverage universe.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

Also