Markets today: Will price hike in Delhi-NCR de-rail rally in cement stocks?

With market moves remaining sluggish and indices hover around key support levels, it’s time investors turn to specific sectors to mint money.

One such sector which investors can consider as a short-term investment bet is cement.

On Tuesday, cement stocks ended up to three per cent lower amid reports that cement manufacturers may drop planned price hike for the month of November. Besides, reports also suggest cement companies have likely cut prices in the Delhi-NCR region.

This comes after average cement prices witnessed a sharp rise of eight per cent month-on-month in October 2021.

Region-wise, prices in nine per cent month-on-month in North, and eight per cent each in South and West. When compared with average prices Q2, cement prices were higher by five to nine per cent across regions last month.

However, yesterday’s selloff need not be considered as a trend reversal.

According to tech charts, even as stock prices of cement makers are facing minor selling pressure, the overall underlying trend remains firm.

Fundamentally, long-term outlook for the sector also remains bullish as analysts expect gradual surge in cement prices as demand picks up on account of festival season coming to an end, government spending on infrastructure related work and uptick in real estate demand.

Analysts at JM Financial, for instance, remain bullish on Ultratech Cement, ACC, Dalmia Bharat, and Shree Cement and have a ‘buy’ rating on each of them.

Apart from cement stocks, auto and IT stocks will be on investor radar today after their outperformance in yesterday’s session.
Besides, initial public offers of Tarson Products Go Fashion (India) will vie for investor interest. The former’s IPO will enter its last day today and has already been subscribed over three times so far.

The latter’s share sale, meanwhile, will open today and will conclude on November 22.

According to analysts, the company’s valuations are in-line with peers but it has a relatively better track record of revenue growth, has higher operating margin, and better return on equity. All these factors make the Rs 1,013-crore issue attractive from a long-term perspective.

On the global front, FII activity and the US retail sales data will dictate the market trends.

Yesterday, the BSE Sensex fell 396 points to end at 60,322 while the Nifty50 closed at 17,999, down 110 points.

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