Hike in cement not to be more than Rs 5-7/bag: Hemang Jani, Sharekhan

Hemang Jani, Senior Vice President, Sharekhan, in a chat with ET Now talks about the expected price hike in the cement space.

Industry experts are saying that that a rise is going to bring a bit of a respite to the cement companies which were seeing losses. But do you think that the question mark still remains?

We too were surprised by the news that in south, the hike per bag could be anywhere from Rs 25 to Rs 35. The overall capacity addition for the whole year is about 55 metric tonnes and we do not see any great demand growth, it has been around 8%.

So we think that this is a little on a higher side and we think that realistically speaking the hike would not be more than Rs 5-7 per bag. The fact that the sector has underperformed, any such trigger could actually cause some kind of a buying interest. But we do not think that there is a case for a significant upside in this entire sector.