Credit Suisse says margins in India's cement sector should expand over the next two years on the back of price increases and improvement in demand, among other factors.
Reuters reported that the investment bank assigns new ratings to Indian cement companies after a change in analysts. Credit Suisse rates ACC Ltd "outperform" with target price of INR1545 while assigning "neutral" rating to UltraTech Cement Ltd and Ambuja Cements with target prices of INR1900 and INR05 respectively.
The Indian cement sector has been struggling of late as post-monsoon demand has failed to take off resulting in prices weakening and the margins of cement producers being dented. The first few months of 2013 have also proved disappointing as cement consumption continues to be lacklustre. The market was factoring in a growth in economic recovery and cement demand in the second half of the current fiscal, however, with the exception of a few states, consumption continues to be muted. In the first 11 months of FY13, growth was around five per cent. Last week, the country's leading cement producer UltraTech Cement reported a six per cent decline in February cement sales.