What is the reason that the stock of India Cements has touched a 14 year high?

India Cements stock was up 5% at Rs.257.60 on the BSE in Friday’s intra-day trade, extending their past two weeks-rally on the back of heavy volumes. Since the start of the new year, India Cements has rallied nearly 37%. The stock is at its highest level since January 2008. This spike came on the back of robust volumes with a combined 75 lakh equity shares changing hands on the NSE and BSE.

The stock has been on a rally since RK Damani and Gopal Damani took a stake in the company. In December 2021, the market price of India Cements rallied sharply after it was disclosed that the Damanis had taken their stake higher to 22.76% in the company. It remains to be seen if the stake has gone up further in the December quarter a the data is yet to be disclosed in its filings to the stock exchange.

There is also a demand angle to this story. The government of Tamil Nadu is expected to give a push to housing and infrastructure development. India Cements also has big orders from Andhra Pradesh and Telangana governments in implementing irrigation, road building and other infrastructure projects. These have created optimism around the counter. It has also seen a price appreciation of Rs.10 to Rs.30 per bag, which has boosted margins further.