December 20, 2018 / 4:39 AM / 7 months ago

BUZZ-Profitability of Indian cement cos should recover from recent lows - Morgan Stanley

** Profitability of Indian cement cos should recover from recent lows, but pace will be slower than expected - Morgan Stanley

** H1 2019 demand growth was better than expected, but benign cement prices and higher costs led to earnings downgrades - MS

** Downside risk seen in the urban/semi-urban real estate segment, though infrastructure-led demand should be sustained; raises FY19 demand growth estimate to 9 pct from 7.5 pct - MS

** Says potential demand moderation in H2 2019 also caps upside to prices; now factors in 1-2 pct price hikes in FY20 vs. 3-4 pct previously

** Says expects industry capacity utilization to rise a modest 1 pct YoY in FY20 to 79 pct

** MS downgrades UltraTech Cement to “equalweight” from “overweight”; slashes PT to 4,116 rupees from 4,954 rupees

** Cuts rating on Grasim Industries to “equalweight” from “overweight”; slashes PT to 958 rupees from 1,286 rupees

** UltraTech’s shares fall as much as 2 pct before recovering to trade 1 percent higher, while Grasim declines as much as 1.15 pct before recovering to trade slightly higher

** As of last close, UltraTech’s shares had declined 5.5 pct this year, while Grasim had lost 26.7 pct

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