Analysts Bearish on This Cement Stock in Near Term, Key Reasons; Do You Own It?

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Analysts Bearish on This Cement Stock in Near Term, Key Reasons; Do You Own It?

By Malvika Gurung -- Shares of the leading cement manufacturing company India Cements (NS: ICMN ) declined 4.04% to Rs 162.55 apiece at 3:20 pm, trading even lower earlier in the session, and nearing its 52-week low of Rs 150.7/share.

The company failed to meet the Street’s estimates for multiple financial figures in the March quarter, released on Friday, including revenue, EBITDA margin and profit numbers. It posted a standalone net loss of Rs 23.71 crore in the period, due to a sharp rise in input costs and volume loss, among other factors.

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Now, as the company’s key figures have failed to meet the Street’s estimates in Q4, market analysts expect the cement manufacturer to face sell-offs in the upcoming sessions.

A major pressure point for the company’s shares to post an immediate price uptick would be the Indian Government's announcement on keeping a check on commodity prices, which includes cement.

This move would not allow India Cements to hike its prices due to rising input costs, keeping it from posting improved financials in the near term, and maintaining pressure on its upcoming quarterly figures, stated Avinash Gorakshkar of Profitmart Securities.

Other analysts have also advised investors from taking any fresh position in the cement company, as its chart pattern suggests further weakness in the scrip.

Sumeet Bagadia of Choice Broking sees the stock tumbling up to Rs 120/share levels in the near term, a downside of 26.2%.

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