After years of weakness, will cement demand perk up?

In an interview with CNBC-TV18's Latha Venkatesh and Sonia Shenoy, Shree Cement MD HM Bangur said the company has had to cut prices by Rs 10/20 per bag but added he was hopeful demand would rise in the coming months.

Traditionally, cement demand is 1.2-1.3 times the GDP growth rate. But in the last few years, cement demand has grown 3-4 percent while the GDP rate has been around 5-6 percent.

HM Bangur

Shree Cement

Even as cement shares have seen an upturn in the market, the on-ground situation for cement demand is still some time away from turning around.

In an interview with CNBC-TV18's Latha Venkatesh and Sonia Shenoy, Shree Cements MD HM Bangur said the company has had to cut prices by Rs 10/20 per bag but added he was hopeful demand would rise in the coming months.

Also read: Shree Cement Q2 net misses forecast, down 47% to Rs 115.5cr

"Traditionally, cement demand is 1.2-1.3 times the GDP growth rate," he said. "But in the last few years, cement demand has grown 3-4 percent while the GDP rate has been around 5-6 percent. So there may be a lot of pent-up demand."

"We could see some softening in prices in the coming month," Mihir Jhaveri, analyst at Religare Capital Markets, said. "But overall, we have a positive sectoral call [on cement stocks."

Religare is bullish on UltraTech , Shree Cement and ACC , Jhaveri added.

To be updated.

UltraTechCement stock price

On May 22, 2014, at 11:10 hrs UltraTech Cement was quoting at Rs 2239.00, down Rs 28.15, or 1.24 percent. The 52-week high of the share was Rs 2465.00 and the 52-week low was Rs 1404.95.

The company's trailing 12-month (TTM) EPS was at Rs 78.20 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 28.63. The latest book value of the company is Rs 633.72 per share. At current value, the price-to-book value of the company is 3.53.