Cement Q3 Results Preview - Likely Be A Muted Quarter Owing To Seasonality Effect: KRChoksey

KR Choksey Report

Volume growth to moderate on subdued demand in the latter half of Q3 FY24E

The cement sector witnessed stellar demand in H1 FY24, on the back of lower rainfall, power and fuel expenses. In Q2 FY24, the cement stocks under our coverage witnessed strong volume growth of 15% to 37% YoY; however, these numbers are unlikely to be repeated anytime soon.

We believe factors such as the drop in demand post the festive season, state elections during the quarter and unseasonal rains in Southern India could impact overall Q3 FY24E volume growth.

In the latter part of the quarter, we believe that the cement demand momentum has plateaued somewhat; however, we believe that companies will report positive demand during the quarter under preview.

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