Revival in the economy and increased government spending in the infrastructure sector has given a boost to the cement companies. In fact, since March, when the upward rally started, cement companies appreciated more than 120% against around 80% appreciation of the Sensex. In the past few months, coal and petcoke prices have also corrected substantially, which helped in reducing the input costs. Here is a list of top 10 stocks from cement sector published in Economic Times.
LARGE CAP STOCKS
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GRASIM INDUSTRIES
CMP: Rs 2723
For the year ended March 2009, Grasims consolidated revenue increased 8.4%. Cement consumption growth in India has remained at a healthy 812 % over the last few months. Grasims capacity additions of 8.9 mt by the FY10 end would support its volume growth and would also help in strengthening its market share, which is 18% at present.
ACC
CMP: Rs 866
Capacity expansion at Bargarh for 1.18 mtpa together with a 30 MW captive power plant is expected to be completed by CY2009. The 3 mtpa plant and a 25 MW captive power plant in Maharashtra is expected to be commissioned by the end of CY2010. Subsequently, it will have a capacity of 30.4 mtpa, which will help it in increasing the top line.
MID CAP STOCKS
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MADRAS CEMENTS
CMP: Rs 110
The company has four grinding units, all in south India. The greenfield expansion at Ariyalur (TN) for an additional capacity of 2mt was completed up to the grinding level in March 2009. With this, the installed capacity at the end of FY09 went up to 10mt. The company is also upgrading one of its existing plants at RR Nagar.
PRISM CEMENT
CMP: Rs 54
It has placed an order for its core equipment with FL Smidth & Co AS, Denmark, and Koeppern, Germany, for brown-field expansion at Satna. It has targeted commissioning of plant by Sept 2010. It has acquired most of the land for mining operations. Also, it has allotted a coal block in Chindwara (Madhya Pradesh) which has been approved.
SMALL CAP STOCKS
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JK CEMENT
CMP: Rs 115
JK Cements 3-mt greenfield plant at Karnataka is likely to be commissioned in Q1FY10. The new plant will increase grey cement capac-ity by 68%. JK Cement meets 90% of its fuel requirement through petcoke. With a sharp correction in crude oil prices, petcoke prices have also declined by 49% from their peak.
JK LAKSHMI CEMENT
CMP: Rs 129
The average price realisation increased by 14.6% to Rs 3,470/tonne in the last quarter. It is setting up a 2.7mtpa greenfield cement plant in Chattisgarh by Oct 2012, taking total cement capacity to 7.5mtpa. The company is also expanding its clinker capacity at Sirohi plant by 0.33mtpa to 3.96mtpa, by Dec 2010.
