Not bullish on cement stocks: Manish Sonthalia

In a chat with ET Now, Manish Sonthalia, Sr. Vice President & Head – Equity Portfolio Management Services, Motilal Oswal Asset Management shares his views on cement stocks.

ET Now: The big laggards have now tried to play catch-up and we saw that yesterday with the cement basket as well. Is there anything that you like out of the cement names?

Manish Sonthalia: The real hope trade is playing out in cement. You have problems of sand. Unless and until the Shah Commission gives out its verdict, I mean construction is just not there and we had all hoped that before elections, the state election, there would be some pickup in construction activity, that has not happened. Part of that has been due to non-availability of sand. Demand is long, the utilised capacity is very low, costs are going through the roof, margins are suffering. I am really not so bullish on cement unless and until I see uptick in volumes. That is just not coming in, to one problem on the other. Few select names in the cement space looks okay. Shree Cement looks quite good because they have been the most efficient and they have been very prudent in pushing small volume expansion in their captive markets but otherwise per se, the outlook on the cement not so positive.