Price hikes, volume growth pick-up to boost cement stocks: B P Singh

In a chat with ET Now, BP Singh, Executive Director & CIO-Equities, Pramerica Mutual Fund shares his views on cement sector.

ET Now: What have you made of the cement earnings?

BP Singh: In the cement sector, ignore last quarter's results simply because if you compare year on year the monsoon during last year was not so strong throughout the year. It was a period of activity was lower.

While, this year we had a very extended monsoon and as a result of its last quarter, the cement numbers were quite subdued. However, if one looks into the month of October you will notice that the prices have come back and the volumes have picked up.

We are not saying that the volumes have picked up extraordinary but it is in line with what the general markets was expecting and so therefore the market is ignoring last quarter result. Market is taking note on what is happening now, the other development which is taking place in cement is that last one to one and a half years some amount of consolidation has started.

You find that some of the cement players are now getting weaker financially and so they are now in a position where they want to get out of their capacities and others are actually acquiring.

Any industry which goes through a phase of consolidation actually is always liked by the market and that is something which is in favour of the sector and that explains why the investor despite not very good result but still picking up the stocks.