Cement Q4 Results Preview - Healthy Demand; Pricing Muted: Axis Securities

Axis Securities Report

Overall, cement demand remains positive as we conclude FY24, driven by pre-election spending, ongoing government emphasis on infrastructure development, and sustained real estate activity.

Moreover, the higher budgetary allocation to infrastructure and construction in the interim budget 2024-25 is expected to sustain demand momentum into FY25.

For companies under our coverage, we anticipate volume, revenue, Ebitda, and profit after tax growth of 9%, 8%, 24%, and 20% respectively YoY, propelled by robust demand and alleviation of cost pressures, particularly in power and fuel expenses.

We estimate the overall cement industry demand to grow between 9%-10% in FY24.

From a medium to long-term perspective, our preferred picks in the sector are:

Large Cap – UltraTech Cement; Ambuja Cement

Mid Cap – JK Cement; JK Lakshmi; Birla Corporation

Small Cap – Star Cement

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