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Money Apr 11, 2012

Cement stocks plunge as CCI ruling on alleged cartelisation expected soon

Stocks of cement manufacturers fell on rumors that Competition Commission of India's (CCI) ruling on alleged cartelisation by companies is expected shortly, with a negative verdict likely to hurt profits and pricing power of manufacturers, dealers said.

AFP

"Rumours of penalties of cement companies by CCI has been doing the rounds time and again," said Vivek Mahajan, head of research at Aditya Birla Money.

Brokerage Macquarie, in an March-end report, said it expects penalties of about 7 percent of total revenue (last three years' average), which equals 5-6 percent of market capitalisation for each year of investigation.

India Cements fell 3.39 percent, ACC fell 2.15 percent and Ambuja Cements lost 2.55 percent.

Reuters

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