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January 29, 2001
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Cement shares up, quake seen fuelling demand

Shares of key Indian cement firms bucked a weak market on Monday on hopes that they would benefit from an expected surge in construction activity in the quake hit state of Gujarat, dealers said.

At 10:50 a.m. (0520 GMT), Grasim Industries, India's third-largest cement firm was up 3.57 per cent at Rs 327.50, Gujarat Ambuja Cements 3.2 per cent higher at 192.30, while Larsen & Toubro, India's largest cement firm was up 1.67 per cent at Rs 246.50.

The Sensex was down 2.11 per cent.

A devastating earthquake ripped across Gujarat last Friday killing thousands and destroying property across the country's second most industrialised state.

Analysts are expecting the government to invest heavily in rebuilding infrastructure in the state but some dealers were sceptical about the extent of actual benefit.

"I think the rise is more speculative driven," said a dealer with a local brokerage.

Cement analysts were also cautious in their assessment. "I wouldn't read too much into the situation. Movement of cement from plants in Gujarat could be affected because of the damage to the surrounding infrastructure," said Mahesh Patil, analyst at Motilal Oswal Securities.

He did not expect much benefit to construction companies as most of the damage was done in the rural areas.

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