About The sector
All sectors are interlinked to each other , they have relationship such that effect in one sector has an immediate and appropriate reaction to the linked sector. As we see fuel price has inverse relation with the sale of cars.Any significant rise in fuel price will slowdown the figure of sale in automobile sector. Likewise cement sector has direct relation with the real estate, which has taken the worst hit and the way prices have tumbled and yet, there being no buyers is an indication of the plight of the sector. This fall in realty has led to fall in the demand for cement, which is expected. And the inability of the cement companies to now pass on any input cost rise to the consumers is expected to take a further toll on their bottom lines. Though net realizations were up in the second quarter, it is expected to come down sharply in the current quarter.
No Immediate Solution
The way to cope up with the reducing demand in domestic market due to slowdown in reality sector by shifting there concentration towards export would also not go through as this time we had a global slowdown.
Other problems.
2. New facilities would all go on stream by next fiscal.So apart from falling demand which has softened the prices, the situation of glut could further exert pressure on the prices. So the bottomline – tough times ahead for cement companies.
About The Cement Stocks
As we see a tough time for the sector ahead , so any better expectation from the cement companies would be a bad idea.