Rajesh Ravi, Senior Vice President of Institutional Research at HDFC Securities, expects The Ramco Cements and Dalmia Bharat to be among the gainers from a change in India's mining law, even as he maintains a bearish view on Ramco Cements itself.

The change relates to the Mines and Minerals (Development and Regulation) (MMDR) Act, the law under which mineral concessions such as limestone mining leases are granted in India. Limestone is the primary raw material for cement production, which makes mine ownership and transfer rights a direct cost and asset consideration for cement producers.

Bearish view on The Ramco Cements

Ravi's bearish stance on The Ramco Cements rests on three factors he cited: weak cement pricing in South India, a slower pace of capital expenditure, and concerns around the company's balance sheet. The Ramco Cements is a Chennai-headquartered cement producer whose operations are concentrated largely in southern India.

Preferences within the cement sector

Within the cement sector, the HDFC Securities analyst said he prefers UltraTech Cement and JK Cement. UltraTech Cement, part of the Aditya Birla Group, is India's largest cement producer by installed capacity, while JK Cement is among the country's leading cement manufacturers.

Ravi also sees upside potential in Ambuja Cements, which is part of the Adani Group, provided the company's capital expenditure execution improves and its margins recover.

Dalmia Bharat, one of India's major cement producers, is the other company Ravi identified as a beneficiary of the mining law change, alongside The Ramco Cements.

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Source: CNBC-TV18