Cement Q2 Results Preview - Soft Demand, Prices Impact Performance; H2 To See Demand Recovery: Axis Securities

Axis Securities Report

Overall, cement demand is expected to grow in the range of 5%-7% in FY25, driven by the government's emphasis on infrastructure development and sustained real estate activity. Additionally, the higher budgetary allocation to infrastructure and construction in the 2024-25 budget is anticipated to lift the cement demand momentum in H2 FY25.

For companies under coverage, volume growth is anticipated at 2%, with revenue/Ebitda/PAT de-growth of 6%/19%/38%, driven by demand moderation, soft prices, and negative operating leverage.

From a medium to long-term perspective, preferred picks in the sector are: Large Cap positive plays are – UltraTech Cement; and Ambuja Cements Ltd.

Mid and Small cap positive plays are – Dalmia Bharat; JK Cement; and Star Cement.

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