Cement stocks lead losers

Today the losers list on the BSE is dominated by cement companies, mainly based in Northern India. JK Lakshmi Cement is down almost 5%, Shree Cement is down 4.5%, India Cement is down 3% and so is Ramco Cements.

The reason? On 24th Oct, following the hue and cry over the hazardous pollution levels in Delhi, the Supreme Court had banned use of petcoke and furnace oil by industries in Haryana, Rajasthan and Uttar Pradesh, effective 1st Nov. The Supreme Court is now scheduled to hear the case next to Dec. 4.

Cement companies in these states are pretty miffed, especially those who use petcoke as this will directly impact their profitability. Shree Cement uses 100% petcoke as a fuel for all its cement and also power plants. Mangalam Cement uses to the extent of 96%, JK Lakshmi at 80%, JK Cement at 75%, JK Cement at 73%, Ultratech at 74% and even Ambuja at over 60%.

These companies will now be forced to use coke and this may inflate their fuel bills.