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Cement stocks fall over 5% after Supreme Court seeks nationwide ban on use of pet coke

The call for ban comes amid the national capital region engulfed by dense fog last week which lowered visibility and forced people to remain inside their houses prompting the government to close schools in the region and including advancing of BS-VI fuel introduction in Delhi.

BT Online        Last Updated: January 16, 2018  | 18:56 IST
Cement stocks fall over 5% after Supreme Court seeks nationwide ban on use of pet coke

Cement industry stocks fell in Monday's trade after the Supreme Court on Friday sought a nationwide ban on use of pet coke and furnace oil.

The call for ban comes amid the national capital region engulfed by dense fog last week which lowered visibility and forced people to remain inside their houses prompting the government to close schools in the region and including advancing of BS-VI fuel introduction in Delhi.

The apex court has already imposed ban on the use of pet coke in the national capital region (NCR).

Pet coke is a cheap but polluting fuel used by cement, paper brick kiln, chemicals and textile industries.

The likely ban will be discussed in a meeting headed by oil minister Dharmender Pradhan on Tuesday.

Reacting to the apex court's call, Shree Cement shares slump as much as 5.3 percent, while JK Lakshmi Cement and JK Cement slide as much as 5.2 percent and 5 percent, respectively.

Companies like Shree Cement and JK Cement are largely dependent on pet coke, and the ban will have an impact on their EBITDA margins, said Rohit Natarajan of IDBI Capital.

Other cement makers such Ambuja Cements and UltraTech Cement Ltd were down 3.28  percent and 1.85 percent , respectively.

While the Shree Cement shares closed 4.21 percent lower, JK Cement fell 5.25 percent. 

Ambuja Cements (3.44 percent) and Ultratech Cement (1.97 percent) also closed lower on the BSE.

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