Southern Cement companies, especially the mid and small sized ones, with more presence in A.P. & Telangana, will be posting better than expected Q2 FY21 numbers, inspite of traditionally this quarter perceived to be dull for Cement sector. Thanks to huge Infra spending by A.P. & Telangana on Irrigation and Road projects, with no let down seen even during this Covid time as well.
For example, NCL Industries has achieved sales of 6.17 lakh MT of Cement in Q2 FY21 against 3.68 lakh MT of Q2 FY20. Hence, a buy call was given in Little Gems section to our members on 14-10-20 at Rs. 116, having already yielded a gain of 20% in less than 2 weeks. Infact yesterday, larger player in the space also saw good up move, due to buying seen by the Funds and Institutional investors.
Many such stories in this space are available and an example to bring home the point is of Sagar Cements, which reported a PAT of Rs. 44 cr. in Q2 FY21 vs Rs. 6.12 cr. YoY. Hence, was recommended in the same Little Gems section at Rs. 585 on 15-10-20, which has risen to Rs. 750+ now, giving 29% in about 2 weeks.
This trend is not restricted to Q2 of FY21 and infact better days are seen for Q3, Q4 of FY 21 and for Q1 of FY22 as well, as next 9 months are seen best for the sector. So, this is a clean sweep and moolah time for Cement stocks.