Cement cos up on decision to fight back cartelisation case

Shares of cement companies rose over 2% on news of them drawing up plans to  question the legality of the cartelisation case when it comes up for hearing before the Competition Appellate Tribunal (Compat) on 29 January.

While ACC   rose around 1.8% to Rs  1,387, Ambuja too was up over 3.96% to Rs 198.10. Ultratech followed trend and surged 2.86% to Rs 1,918.95 on reports that  cement companies will present their arguments defying carterlisation charges levelled by the Competition Commission of India (CCI)

According to a Mint report, the key argument that the cement makers are planning to make is that the commission did not hear their side of the story and its decision was based on allegations by builders' associations. They are also saying CCI relied too much on circumstantial evidence as opposed to direct evidence.

Heidelberg Cement also rose over 2% to Rs 54.15 following this news and also after the company's chairman and managing director in an interview said that there is a price hike in west and central regions. He also said that in the south market, a price revision cannot be ruled out on improved sales scenario.

Heidelberg has recently hiked prices by Rs 10/bag on an average. The company took the decision to revise prices after sales picked up around 20%, month-on-month in December after months of sluggish growth.

On a larger scale, the industry is poised for a moderate growth in the medium term due to a sudden spurt in construction activities on eased policy reforms. The sector, at the beginning of 2013 has even predicted a 12% growth and a significant price correction.