Cement companies share price surge up to 9.5% higher on Wednesday: Here's what investors should know

Cement stocks: Defying the market's negative trend, Cement stocks rose up to 9.5 per cent on the BSE on the back of multiple triggers. Among them, Ambuja Cement and ACC Limited hit their respective record highs on the exchanges during Wednesday’s trading session.   

From broader markets, JK Lakshmi Cement shares gained most by over 9.6 per cent to Rs 617 per share, followed by India Cements shares, that jumped almost 7.5 per cent to Rs 259 per share (near 52-week highs of Rs 259.9 per share) on the BSE intraday.  

Ramco Cements and JK Cements surged between 1-2 per cent intraday, but succumbed to negative market sentiment and traded almost flat around 0.5-1 per cent lower today. 

From the heavyweights, Ambuja Cements and ACC each soared over 5 per cent on the BSE intraday and hit their respective fresh life highs of Rs 511.8 and 2703.85 apiece. While Shree Cement and UltraTech each gained over 1 per cent intraday, they however succumbed to the market’s negative pressure. 

The surge in the stock is mainly attributed to the overall positive outlook in the sector, going forward, as well as the Ambuja Cements fundraising plan announcement on Tuesday.  

"A meeting of the board of directors is scheduled to be held on September 16, 2022, to consider and evaluate a proposal for raising of funds by way of issue of equity shares, convertibles and / or any other eligible securities, on a rights/preferential or any other permissible mode/ and/or a combination thereof as may be considered appropriate," Ambuja Cement said in an exchange filing. 

 Analysts are of a view that the cement stocks mainly surged on key factors such as price hikes, petcoke cooling off, margins likely to bottom out in the second quarter of FY23 and anticipation of volumes as well as demand rise in the second half of the current fiscal.  

Cost pressure is expected to ease in coming quarters as the global petcoke prices have corrected by around 40 per cent in the past 4 months, a domestic brokerage firm Emkay Research said in a report.   

Similarly, domestic petcoke prices have corrected by around 30 per cent in the past 3 months, the brokerage added, further stating that the drop in fuel prices would offer cost savings for the cement companies from Q3FY23.