Citi maintains view on Indian producers

Citi maintains view on Indian producers
02 August 2011

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.
Published under Cement News