Cement prices bounce back before monsoons - Emkay

- All India prices at Rs293 have increased ~Rs15/bag or +5.1% mom in May-13 after 2 consecutive months of declines in the busy construction season

- With recent increase in coal price (CIL hiked prices on 28th May-13) and earlier hike in railway freight charges, cement producers seem to have passed on these cost increase and bring back certain degree of pricing discipline

- Sharp hikes seen in the south (+14% mom) followed by west central (~5% mom). AP prices hikes by Rs90/bag over last 2 weeks led by strict production discipline

- Cement offtake remains weak even in peak season. However last leg of construction season remains before monsoon picks up - dealer see another round of hike in coming weeks

- Remain negative on ACC & retain neutral view on Ultratech, Ambuja & Shree. Remain positive on Grasim & prefer Madras Cements in mid caps.

Source : Equity Bulls

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