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Emkay Global Positive On Cement Stocks In Medium Term



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Krishna Kumar Karwa, MD of Emkay Global on Friday said that cement companies saw a correction and looks good from a medium-term perspective, adding that the sector is seeing lower input costs and better realisations now.

“Cement companies have corrected sharply in the last 6 months. Last quarter was probably the worst for most of the cement companies as far as profitability was concerned. And now high input prices have started moderating and even realizations are improving. So, from a medium-term perspective, maybe cement companies should be invested in,” Karwa said.

Talking further about the sector, he said that the small cement companies have been in focus due to merger with larger players.

“There will also be some action in the smaller companies in terms of getting merged with the larger company and that is also an opportunity,” said Karwa.

While talking about new age companies, Karwa said, “If any company is thinking of utilising its cash for buybacks, it’s a function of confidence in its business prospects.

“It’s also a question that they may not require to burn further cash and hence, they believe that buying back shares at current valuation could be more attractive,” he said.

According to him, midcap IT valuations may see larger correction versus largecap companies. He further added that one can look at IT companies from a long-term perspective.

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