>CEMENT SECTOR: Higher profitability to sustain, given increasing capex cost

Highlights:
 Volumes are likely to grow 8-9% in FY13, driven by individual housing and expected infrastructure push. Seasonal price correction has been sub-normal till August due to delayed monsoon.

 Capacity addition should slow down to ~60mt over FY13-15. Increase in capex cost necessitates sustenance of higher profitability; downside risks are limited.

 The costs of power, fuel and freight, which have been rising, are likely to stabilize at elevated levels. The focus would remain on enhancing operating efficiencies and maintaining margins.

 We (MOTILAL OSWAL) prefer Ambuja and Grasim/Ultratech among large-caps and Shree Cement among mid-caps.

To read report in detail: CEMENT SECTOR
RISH TRADER