Prefer Ambuja, UltraTech among cement stocks; poised for an upmove: Deven Choksey

In a chat with ET Now, Deven Choksey, MD, KR Choksey Securities, shares his views on the cement space. Excerpts:

ET Now: Do you like anything from the cement pack and does it seem like the move that we have seen off late is sustainable?

Deven Choksey: Many of the cement companies are positioned well and particularly Holcim Group and UltraTech are the two companies or the two groups I would say which are holding the larger amount of capacity close to around 35-40 per cent of the capacity of the country. Given the kind of improvement in the scenario for off take because of the roll out of the infrastructure projects in the construction activity beginning with to a greater extent, these two companies or the groups probably would have larger amount of benefit going forward which is easily possible.

Now where the benefit would be seen, I would think that higher the capacity utilisation better would be the yield and the margins and that is where one could argue for buying into portfolio Ambuja, ACC combined which is about 60 million tonne capacity. UltraTech is of course 70 million tonne capacity. So to a greater extent this particular ultimate goes in favour of Ambuja which has relatively less participated into this particular rally. It has remained in the zone of 200-220 for good time and it has consolidated. So technically also the counter is well poised for an up move. I would think that given the choice, I would probably buy first as a priority Ambuja Cement and thereafter UltraTech Cement in the portfolio.