Shares of UltraTech, Shree Cement, Ambuja, ACC, Ramco and JK Lakshmi Cement rose sharply in trade, rising 2-6%, while the broader index opened lower on September 6.

Shree Cement and UltraTech Cement were the two biggest gainers on the stock market. Ambuja Cement was one of the top five active stocks on the NSE, with a trading volume of 25,706,401 shares.

Experts believe the sector is poised for a re-rating after Adani Group bought Holcim‘s stake in ACC, Ambuja. On September 2, Morgan Stanley Asia bought 9.4 lakh ACC shares for more than Rs 215 crore in open market trading. According to block trade data provided by the National Stock Exchange, Morgan Stanley Asia (Singapore) Pte Ltd bought 9,41,557 shares in the company (NSE).

On August 26, Adani launched a public offer of Rs 31,000 crore to buy an additional 26% stake from ACC’s public shareholder Ambuja Cements.

“Cement companies will see a strong second half as input cost pressures ease and realisations improve,” said Krishna Kumar Karwa of Emkay Global. The brokerage has a call option on UltraTech Cement with a price target of Rs 7,100 against Rs 7,100. A call option on Shree Cement with a target price of Rs 23,550. Meanwhile, Axis Securities has a buy rating on JK Cement with a target price of Rs 3,020.

Reports show that cement companies have raised prices to Rs 20 per bag for September 2022 in the Western/Eastern region. The latest price hike comes after cement prices fell by around Rs 40-60 per bag since May 2022. It is worth noting that domestic petcoke prices are down 25% from their peak. The company is targeting a 15% gain in FY23.

Stocks continue to rise under pressure from CCI scanners on cement cartelisation. An investigation by the Competition Commission of India found that as many as 20 companies were involved in anti-competitive agreements and monopolistic prices in the eastern and southern regions of the country.

According to media reports, ACC Limited, UltraTech Cement, Dalmia Cement, Shree Cement, NUVOCO Vistas Corp and Ambuja, as well as the Manufacturers Association, have approached CCI to gain more time to respond to the alleged cartelisation.