The cement industry demand is slowly improving from the disruption created from Covid-19 due to pent up demand and improved rural demand.
Analysts at Emkay Global Financial Services remain positive on the cement sector and expects industry volume to start improving from the January-March quarter (Q4FY21). Demand recovery in North, Central, and East regions surprised positively after easing of the lockdown norms and there should be a gradual improvement in demand in South/Maharashtra markets.
The brokerage firm expects cement prices to improve after the monsoon season.
Meanwhile, analysts at IDBI Capital expect cement industry volume to decline by 15 per cent year-on-year (YoY) in Q2FY21. Post June-20, the decline in the cement volume has increased as pent up demand has faded and monsoon has set in. Average Cement prices at an all India level has declined by 2 per cent quarter-on-quarter (QoQ) and region-wise barring south, and other region has witnessed a decline in cement prices in Q2FY21, the brokerage firm said in an earnings preview.
We would watch for management commentary on cement sales volume expectation for October-March (H2FY21) in the non-trade and trade segment and sector-wise outlook and new opportunity for sales volume, it said.