Indian cement stocks fall on 'modest' capital spending hike in budget

ACC

01/02/2025 08:23

By Hritam Mukherjee
       Feb 1 (Reuters) - 
    Indian cement companies' shares fell in a special trading
session on Saturday after the government announced a 'modest'
spending hike for infrastructure projects in the annual 
    budget
    , which failed to impress investors.
  
    UltraTech Cement's  ULTC.NS  shares dropped 2.7%, while
those of rival Adani Group's cement firms Ambuja  ABUJ.NS  and
ACC  ACC.NS  slumped 4.5% and 2.3% respectively.
    Other big cement firms - Shree  SHCM.NS  and Dalmia Bharat
 DALB.NS  - declined 3% and 2% respectively.
    The Indian government said it will spend a record 11.21
trillion rupees ($129.54 billion) on infrastructure in the
upcoming financial year that begins on April 1, but the increase
in planned spending disappointed markets.
    "The capex outlay for fiscal year 2026.. looks modest
compared to raises made in FY25 and FY24 budget, and misses
market expectations slightly," said Amit Anwani, research
analyst at Prabhudas Lilladher.
    Cement, a key construction material, is a direct beneficiary
of government's capital spending. India's infrastructure index
 .NIFTYINFR  reversed gains following the budget announcement,
and was last down 1.5%.

 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Varun H
K)
 ((Hritam.Mukherjee@thomsonreuters.com; X: @MukherjeeHritam;))