Pricing discipline supporting the cement stocks: Nine Rivers Capital

In a chat with ET Now, Sangeeta Purushottam, Managing Director, Nine Rivers Capital, shares his views on cement stocks.
ET Now: Are you also surprised with the resilient in cement? Not only cement stocks have been outperformers, cement numbers also have been strong. At a time when are talking about a slowdown in economy, the investment cycle has broken down but cement companies are selling more and more?

Sangeeta Purushottam: The numbers for cement in some ways are surprising because cement overall even in really bad years has grown at about 6-7% and sometimes tending to 8%. So that is okay. We did have a low-base effect through part of last year. So there is some bounce back happening on the back of that. But the resilience in the stock prices, given what came out of CCI is surprising and when you talk to cement companies, they feel that they are on fairly strong footing in terms of being able to fight against that order and the pricing discipline that has been there in the industry is likely to stay. So that is really what is supporting it and there are very few pockets in the market where one can see reasonable earnings growth. The second thing that happening in cement companies is, with coal prices having come off, some of the cost pressures that they were facing are also reducing. So it is really that combination which is working but I am surprised overall at cement.