Gujarat Ambuja Cements advanced on Thursday on sustained buying support from institutions.

By 12:50 IST, the scrip of India's fourth largest cement maker rose by 2.31% to Rs 175 on the BSE, recorded volumes close to 300,000 shares. In the last four sessions, the stock has risen by 9.4% from Rs 160 on 2 May 2003.

The Gujarat Ambuja Cements stock rose on sustained buying support from institutions. As per market buzz, Jardine Fleming, Kotak Securities and Alchemy were some of the active buyers on the GACL counter in the last few sessions.

The recovery in the GACL scrip is on hopes that the company will benefit from the huge demand for cement for post-war reconstruction work in Iraq. There were reports that GACL have started receiving enquiries from cement importers in the Gulf region. There are hopes that the company may bag a huge order soon.

GACL's plants are located in the west coast of India and is best suited to supply cement and clinkers to Iraq. Other than GACL, Larsen & Toubro is also a major exporter of cement and clinkers to the Gulf region.

Meanwhile, the cement industry is expected to witness stellar growth in volumes in the coming months following sustained increase in construction activities in India. GACL can expect increased demand from the government's thrust on the infrastructure sector in the Union Budget 2003-04. The initial government funding for new infrastructure projects will total Rs 2,000 crore (Rs 20 billion) for the year. Principally, investments will be made in railways, airports and sea ports through an innovative funding mechanism. Also, demand continues to be driven by the Golden Quadrilateral road project and the sustained growth in housing construction activity.

In April 2003, GACL reported impressive rise in production and dispatches, despite a transport strike and disruption at its Panvel terminal. The company said that its production and shipments were at 8.42 lakh tonnes in April 2003. This represents a 35% rise in production and a 34% increase in dispatches over April 2002.

For the third quarter ended 31 March 2003, GACL registered a 22% rise in net profit to Rs 66.86 crore on a 26.35% increase in net sales to Rs 482.45 crore (Rs 4.82 billion).

BSE code: 500425