Stock market today: Ahead of Ambuja Cement results for Q3FY22, cement stocks are under selloff heat. UltraTech Cement shares are down near 1 per cent, Shree Cement share are down 0.50 per cent, JK Cement share price is quoting 1.50 per cent lower from its yesterday’s close, Ramco Cements shares shed around 1 per cent whereas ACC cement shares are down near half a per cent today.
According to stock market experts, cement shares are under pressure ahead of Ambuja Cement results as market is expecting weak Q3 numbers from the cement major. They said that market is trying to adjust with the new EPS (earning per share) and P/E ratio of the cement companies comparing with the P/E ratio and EPS of Ambuja Cement in the wake of weak Q3 results. They went on to add that major reason for weak Q3 results from cement major is rising input cost after surge in coal prices.
Speaking on why cement prices are under pressure ahead of Ambuja Cement results for October to December 2021 quarter; Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Cement shares are under selloff heat ahead of Ambuja Cement results announcement as market is expecting weak Q3 numbers from the cement major. Market expects that input cost of the cement companies have gone up in recent quarter after the rise in coal prices. So, input cost of the company would lead to rise in margins of the company, even when they manage to keep their revenue on the higher side.”
On how weak Ambuja Cement results can impact other cement companies; Ravi Singhal, Vice Chairman at GCL Securities said, “In the wake of weak Q3 earning of Ambuja Cement, market is adjusting the EPS and P/E ratio of Ambuja Cement shares. After adjusting Ambuja Cement shares P/E ratio and EPS, these indicators of other cement stocks have gone down and this is the reason for other cement stocks being under pressure ahead of Ambuja Cement results for Q3FY22.”
Asked about stocks to buy from the cement segment in this falling cement stocks, Ravi Singhal of GCL said that cement companies are expected to report weak results in upcoming quarter as well because the rising coal prices are expected to fuel its input cost in near term. He advised positional investors to look at metal, banking and real estate stocks instead of cement stocks.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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