Cement Sector Check - Price Hikes Hinge On Hopes Of Demand Recovery: Systematix

Systematix Research Report

India’s key infrastructure sector saw 1.8% contraction in August largely led by excessive rains in various parts of the country. Moreover, general elections and slower infrastructure execution also compromised demand.

Despite hopes of demand revival from the fag end of Q3, we expect the cement industry growth to taper off from 8-9% to 4-5% for FY25 due to sustained slowdown in demand.

Lower volumes and realisations will impair an already soft Ebitda/tonne in Q2 FY25. Long term growth prospects continue to remain sanguine backed by strong push in housing and infrastructure initiatives.

Ultratech, ACC and Sagar Cements remain our top picks within the coverage universe.

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