On the back of strong demand, Cement scrips were making recoveries from their previous losses. On Friday, India Cements climbed up 0.83% to Rs 188.10. ACC passed up 0.5% to Rs 851, Ambuja Cements rejected 2.64% to Rs 116.25, Ultratech cement turned down 2% to Rs 819.95 and Birla Corp slumped 4.44% to Rs 244.15.

ACC benefitted 6.58% from its new low of Rs 798.45 on 13 June 2007 to Rs 851 on 22 June 2007. From a recent low of Rs 109.20 on 11 June 2007, Ambuja Cements gained 6.45% to Rs 116.25 on 22 June 2007. India Cements rose 12.8% from a recent low of Rs 166.75 on 11 June 2007 to Rs 188.10 on 22 June 2007. Ultratech cement rose from its recent low of Rs 790.50 on 13 June 2007 to Rs 819.95 on 22 June 2007. Birla Corp jumped 16.2% from a recent low of Rs 210.10 on 13 June 2007 to Rs 244.15 on 22 June 2007.

In May 2007, Cement Manufacturers Association (CMA) reported an increase in cement sales by 10.6% to 14.21 million tonnes.

The cement industry has decided not to raise cement prices for one year. The cement manufacturers, whose capacities will stumble upon stream in the near term, are capable of increasing combination, profit from regional price differences and take on cost cutting measures. About two months back, cement companies promised government that they wouldn’t raise price for one year, in government’s efforts to battle growth during inflation.

It is estimated that 18-20 million tones of capacities will come on stream in FY 2008 and much more in FY 2009. On the positive side, booming real estate sector, capacity additions by major industries, and huge investments proposed in special economic zones (SEZs) can scale up demand. Also, with bumper cash flows, the holding power of the industry has improved.

After seeing a solid upsurge in profit in FY 2007, the cement industry is perking up itself for a softer expansion in the current financial and softening of profitableness during next fiscal.

In Q1 ended March 2007, ACC’s net profit climbed 54.47% to Rs 363.75 crore as compared to Rs 235.48 crore in Q1 March 2006. Net sales ascended 23.68% to Rs 1634.76 crore during the quarter as against Rs 1321.80 crore in Q1 March 2006.

Ambuja Cements’ recorded an increase of 43.1% in its net profit to Rs 590.74 crore in Q1 March 2007 as against Rs 412.77 crore in Q1 March 2006. Net sales rose 33.5% to Rs 1433.84 crore in Q1 March 2007 as against Rs 1074 crore in Q1 March 2006.

For its fourth quarter ended March 2007, UltraTech Cement posted net profit of Rs 231.54 crore as against Rs 132.11 crore in Q4 March 2006. Sales rose 38.21% to Rs 1465.52 crore in Q4 March 2007 as against Rs 1060.35 crore in Q4 March 2006.

India Cement’s net profit rose 417.24% to Rs 139.81 crore in Q4 March 2007 as against Rs 27.03 crore in Q4 March 2006. On the other hand, Birla Corporation posted 50.71% increase in its fourth quarter results to Rs 101.19 crore as against Rs 67.14 crore in Q4 March 2006. Sales rose 12.69% to Rs 444.06 crore in Q4 March 2007 as against Rs 394.06 crore in Q4 March 2006.