Skipping cement stocks better till more clarity comes: BNP Paribas

Gaurang Shah, Asst VP, Geojit BNP Paribas Financial Services in an interview to ET NOW said that by and large with the kind of performance you have seen over the last month, two cement have actually been a dragger and an underperformer so I would use opportunities to exit or even pass as a matter of fact and wait for more clarity to come.

Cement stocks, two of them coming out with results today Shree Cement the Q4 loss is 71 odd Crores and even Grasim coming out with its results consolidated profits coming in a 654 odd Crores, I mean with the monsoon setting in a little bit of a dampener here?

I think it could possibly be so but last time around when you really actually saw I think be it monsoon winter or summer I think the cement company share prices was really running sky high and month on month numbers were also quite significant.

Having said that just to flash on those numbers that you mentioned I think Shree Cement was quite a bit of a negative surprise in fact we were not expecting that I guess that I mean honestly speaking I have really not looked into the details of those numbers but there should be some extraordinary item which has bought those kind of downticks in Shree Cement.

Grasim well I would really not going for front line companies as far as cement goes I think midcap there is a little bit of value but again by and large with the kind of performance that you have seen over the last month or two cement has actually been a dragger and an underperformer so I would use opportunities to exit or even pass as a matter of fact and wait for more clarity to come.

Raw material cost input also has gone up and thereby margins have got squeezed and like we all know if the cement prices go up then government definitely comes in place a spoil sport.