Cement stocks rise nearly 7%; here’s what’s aiding the rally

Heidelberg Cement and India Cements were the top gainers among the cement stocks rising between 5% and 7%, while other companies saw a rise of 2% to 4% in their share prices.

Among cement shares, Heidelberg Cement India rose up to 7%. The stock hit a high of ₹239.3 per share. However, the shares pared early gains to trade at ₹236.85 apiece, up 5.36%, on the NSE at 1:15 pm.

The India Cements shares rose up to 5% to hit a high of ₹323 per piece on the NSE. The stock later trimmed some gains to trade at 319.9 apiece, up 4.07% at 1:15 pm.

KCP Ltd shares rose as much as 5.79% to hit a high of ₹264.8 per piece on the NSE. The stock was later trading 4.68% higher at ₹262 apiece on the NSE.

Among other gainers, HIL, Everest Industries, Orient Cement, Shree Cement, ACC and Ambuja Cement also advanced up to 2%. Leading cement manufacturer Ultratech Cement, however, retreated from early highs to trade 1% down at ₹11,706.95. Dalmia Bharat, Birla Corp, and Ramco Cement also declined marginally.

Cement shares have gained amid expectations of a major boost to infrastructure and housing segments in the Union Budget 2024 next week.

The government is expected to boost infrastructure spending in the full budget to stimulate growth and job creation in the country. Finance Minister Nirmala Sitharaman in the Interim Budget had announced an 11% increase in capital expenditure to ₹11 trillion for FY 2024-25.

The cement sector is also expecting announcements on a dedicated cement corridor. The government had announced three economic corridors in the Interim Budget.

Various modes of transport like rail, road, and waterways would be integrated to make it more efficient to transport cement and related materials.

Sustained boost to housing and infrastructure would stimulate demand for cement products.

Improving monsoon and ongoing kharif sowing season may also boost the demand for cement products.