India Cements share price jumps 41% in two days after Radhakishan Damani’s brother picks stake

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Updated: February 26, 2020 1:54:25 PM

India Cements share price has zoomed 41 per cent in the last two days after D-Mart retail stores owner Radhakishan Damani’s brother bought a 2.75 per cent stake in the company in bulk deals.

India Cements scrip jumped 20 per cent on Wednesday to trade at Rs 104.45 a piece. Gopikishan Damani holds an 8 per cent stake in Avenue Supermarts individually.

India Cements share price has zoomed 41 per cent in the last two days after D-Mart retail stores owner Radhakishan Damani’s brother bought a 2.75 per cent stake in the company in bulk deals. Gopikishan Damani purchased 85,22,428 shares in the company at a price of Rs 83. India Cements scrip jumped 20 per cent on Wednesday to trade at Rs 104.45 a piece. Gopikishan Damani holds an 8 per cent stake in Avenue Supermarts individually. India Cements share price was down 13 per cent in the last one year up to February 24. According to the shareholding pattern available on India Cements website, Radhakishan Damani too has a 4.7 per stake in the company.

Prices of cement in India have increased 1-2 per cent on-month basis in January and 6 per cent year on year according to a report by ICICI Securities, which says the jump in prices is backed by better demand coupled by higher prices. “Our channel checks suggest prices have further improved by Rs30-40/bag in Andhra Pradesh/ Telangana (as prices are still low), while prices are broadly flat MoM across most regions in February 2020. Overall, the sector’s profitability, which has sharply improved this year, is likely to see further expansion in the medium term led by better utilisation,” the report adds. 

Motilal Oswal expects the cement sector utilisation to improve structurally over the next three years given the capacity addition is limited at 4 per cent CAGR. “We believe that the north and central India markets are best placed structurally as they have achieved a high level of consolidation with utilization at ~85% already. Prices in these regions should continue to fare better,” Motilal Oswal said in a research report. 

The surge in prices of cement have been helped by a demand pickup in North India and Central India. “Average pan-India realization has increased both 3/3% QoQ/YoY, mainly driven by robust pricing in north/central/Gujarat markets. In FY20, cement prices have been strong across north/Gujarat markets (+~10-14% YoY). In Central/west markets prices are up by ~8% YoY.” said HDFC Securities on Monday. 

India Cements in the third quarter of the current fiscal failed to impress with a consolidated loss of 8.79 crores. Total income of the company stood at Rs 1,250 crores down from Rs 1275 in the previous quarter.

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