Would prefer JK Cement, JK Lakshmi Cement: Pankaj Pandey, ICICI Direct

ET Now spoke to Pankaj Pandey, Head Of Research, ICICI Direct, on his stock pick in the cement space.

What did you make out of the recent activity in the cement stocks in particular the southern based stocks with the kind of price hikes that they have seen and would you take a play on them or would you just stay out and wait?

In terms of cement, one needs to be very cautious and in terms of approach towards investing. What has happened is that we have added about 58 million tonnes of capacity and a lot of that capacity has really come in to south.

With the price hikes what players have announced in south, it remains to be seen as to whether these prices sustain, given the softness in demand what we have seen. So going forward though we would expect that the demand would catch up with the excess supply which really come into, in terms of really looking at stocks, we would prefer some of the northern based players like JK Cement, JK Lakshmi Cement wherein the demand is quite strong and these players are available at 45% to 50% discount to replacement cost which is about $115 a tonne. So in that sense, I will prefer north based players compared to south based players.