Cement Q4 Results Preview - Robust Demand But Pricing Muted: Axis Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Axis Securities Report.After witnessing good volume growth in Q3 FY23, momentum in cement demand continued in Q4 FY23 as well, primarily driven by the government infrastructure and housing push and well-supported by private real estate demand. Demand momentum began on a good note in January 2023 followed by some softness in February 2023 and concluded on a higher note despite the higher base of the last year. While some softness in demand was witnessed in March 2023 on account of the Holi festival, the later part of the month witnessed a sharp spike in demand. Institutional demand was more robust and was led by increasing construction activity in most regions. Both central and State governments infra-related projects witnessed good execution. Many large states are due for election in FY24 which is a supporting factor for cement demand and we believe the same will continue moving ahead. Retail cement demand witnessed some recovery. However, our channel checks suggest that rural demand has still not recovered meaningfully. On the other hand, urban and semi-urban demand was scattered based on the regions. Region-wise South, East, and North India witnessed better demand traction followed by West and Central. Keeping these factors in view coupled with higher demand despite a large base last year, we expect volume for our coverage universe to grow by 8% YoY. While Q3 FY23 witnessed good price hikes, the cement companies attempted further price hikes in Q4 FY23 to sustain the higher cost of production. However, the price hike could not sustain despite good cement demand on account of higher competitive intensity and the entire price hike (Rs 15-Rs 20/bag) was rolled back..Click on the attachment to read the full report:.Construction Sector Q4 Preview — Revenue Visibility Supported By Healthy Orderbook: Nirmal Bang.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Cement Q4 Results Preview - Robust Demand But Pricing Muted: Axis Securities

With higher demand, softening in commodity prices, and better realisation, industry performance is set to improve moving ahead.

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