Cement Sector Check - Price Weakness Persists; Demand Slows Down Seasonally: Motilal Oswal

NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Our channel checks suggest that pricing pressure continues for the cement industry, resulting in a ~3% month-on-month reduction in the all-India average cement price (trade) in July-24. Prices declined across regions in the range of ~1-5% month-on-month, with the highest decline recorded in south (down 5%) followed by west and east (down ~4% each), north (down ~3%), and central India (down ~1%). Further, cement demand has slowed down as rains extended across the country. We estimate cement volume to decline ~5% YoY in July-24, partly due to a higher base.Dealers have indicated that cement price is under pressure due to demand slowdown and volume push by leading players. Most of the dealers do not expect price hikes in the near term due to oversupply and seasonality impacts. In Q1 FY25, realisation for our coverage cement companies (for results announced so far) declined 2.9% QoQ (down by Rs 160/tonne). Given further corrections in cement prices in July-24 and no price hike in sight, we believe realization may further decline ~1-2% QoQ in Q2 FY25E, with a higher decline for south-based players (up to ~3% QoQ).Average fuel price (both petcoke and coal) was flat month-on-month in July-24. However, the spot price increased month-on-month. Prices of domestic/imported petcoke rose 2% month-on-month to Rs 12,663/tonne and $110/tonne, respectively. Imported coal (South Africa) price was up ~7% month-on-month at $114/tonne..Click on the attachment to read the full report:.Cummins, Lupin, Shree Cement, Gujarat Gas, Aditya Birla Fashion, Dr. Lal Pathlabs Q1 Review: HDFC Securities.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Cement Sector Check - Price Weakness Persists; Demand Slows Down Seasonally: Motilal Oswal

The brokerage continues to believe that the acceleration in industry consolidation and improvement in clinker utilization can improve the industry’s pricing power in the long run

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