Railway budget boost for cement shares

DALAL STREET SPIKES

Shares of cement makers bounced back from lower levels on Tuesday after Railway minister left freight rates unchanged contrary to expectations of a modest hike.

Analysts said, no hike in freight rates would help these companies to control the transportation cost. Cement major, Gujarat Ambuja was up 1.62 per cent to close at Rs 276.65 while ACC gained 2.74 per cent to close at Rs 243.70.

ACC recovered from its day's low of Rs 234 with volumes accounting for more than 11 lakh shares at the BSE. Grasim Industries was up 2.11 per cent to close at Rs 1,034.30. Cement stocks had plunged in the recent past on the onset of the monsoon and a hike in coal prices announced by the government in mid-June 2004.

A senior sector analyst said, a consolidation in the cement sector is also attracting fresh buying. Following the acquisition of L&T's cement division by Grasim Industries, the Grasim and ACC-GACL combine will together control 43 per cent of total market share in cement.