Citigroup keeps ACC, Ambuja, Ultratech at Sell as it expects cement prices to continue falling due to sluggish demand growth; but keeps Grasim at Buy as it trades at an enterprise value of US$55/t less than half of the others.
The house targets ACC at INR975 (US$22), Ambuja at INR108, Grasim at INR3010, and Ultratech at INR985. "We spoke to cement dealers to get a sense of prices across India. Our contacts in Mumbai (western India) and Jaipur (north India) indicated that prices were down by about 3.0% to 4.0% in July on a MoM basis.
"Prices are down in most markets except Chennai and Bangalore (both in south India) where prices are flat month-on-month," the house says, adding that cement prices have fallen on month in July in seven of the last 10 years.