CAT directs cement companies to deposit Rs. 630cr - Angel Broking

The Competition Appellate Tribunal (CAT) in an interim order has directed cement companies to deposit 10% of the Rs. 6,307cr penalty imposed on them by Competition Commission of India (CCI) for forming cartel in the sector. Passing an interim order, a COMPAT bench headed by its Chairman Justice V S Sirpurkar asked 10 cement producers along with their lobby group Cement Manufacturer's Association (CMA) to pay around Rs. 630cr within a month. The tribunal also clarified that if the cement firms fail to deposit the amount within a 30 days timeframe, their petition would be dismissed. Cement companies upon whom the penalty has been imposed include top cement players such as ACC, Ambuja Cements, UltraTech Cements and JP Associates. We are not revising our financial estimates as the interim order has not upheld the levy of penalty by CCI.

Currently we have a neutral view on the sector. We maintain an Accumulate on ACC (TP: Rs. 1,361) and Buy on JK Lakshmi Cement (TP: Rs. 143).

Source : Equity Bulls

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