Positive on ACC: Pankaj Pandey, ICICI Direct

Pankaj Pandey, Head of Research, ICICI Direct, in a chat with ET Now talks about the cement space.

Is there any particular sector that you would downgrade purely on the basis of the earnings that have been delivered?

In terms of negative earnings outlook sectors, cement was one sector which was expected to underperform but the kind of results of ACC and Ambuja were even below our estimates. So given that - since we feel that the large cap ACC is still fine at about EV per tonne of about $120 whereas Gujarat Ambuja looks stretched to us - we would be negative on Gujarat Ambuja whereas positive on ACC.

We will have to watch out for results of north based and south based peers. We are expecting companies like India Cement or for that matter north based players like JK Cement or JK Lakshmi Cement to post a loss. But we look at the commentary in terms of whether this is the lowest levels these companies would suffer in terms of their overall growth. So in case of the outlook or the commentary, the outlook remains positive. Valuation wise a lot of your tier 2 cement companies still offer for value even though the outlook would remain hazy for the next two or three quarters.