Cement counters took a beating on the bourses today following talks that the cement prices across Maharashtraa had dropped as mush as Rs 10 a bag. Despite encouraging quarterly performance by Gujarat Ambuja Cement, the shares of key cement players such as ACC, Grasim and L&T witnessed a drop.
According to dealers, the market was abuzz with talks that after witnessing a one-way upward movement in December, cement prices in Maharashtra had cracked, diving by Rs 8-10 per bag over the last couple of weeks.
The share price of ACC closed at Rs 165.05, down 2.94 per cent, GACL ended at Rs 214.15, lower by 4.72 per cent, Grasim closed at Rs 284.65, down 1.93 per cent and L&T ended at Rs 195.10, lower by 1.51 per cent.
A stockist attributed the fall in cement prices to a sharp decline in demand from government departments and infrastructure projects. The rumours sparked off selling pressure despite expectation of robust results for the December quarter, owing to improved shipments and higher cement prices.
In fact, the GACL stock like its peers had been doing rather well in recent months. In the last four months, GACL rose 65 per cent from its 52-week low of Rs 136.30 on 17 September 2001 to Rs 224.75 on 23 January 2002. Volumes increased to 1.90 lakh shares from 40,000 in the same period.
GACL has posted a 75.6 per cent jump in Q2 ended December 2001 net profit to Rs 57.16 crore compared to Rs 32.55 crore in the corresponding period of the previous year. Total sales for the quarter ended 31 December 2001 rose 17.4 per cent to Rs 350.08 crore from Rs 298.22 crore in the corresponding quarter in 2000. Other income increased to Rs 5.06 crore as against Rs 2.16 crore in DQ 2000.
Both net profit and sales growth meet analysts' predictions. GACL has reported a 36.76 per cent rise in cement despatches for December to 6.25 lakh tonne on a year-on-year basis.
In the last three months the company has sold 18.02 lakh tonnes of cement compared to 15.29 lakh tonnes in the previous year. Despatches in the July-December period were 16.68 per cent higher at 3.26 million tonnes.
