Demand recovery crucial to fill up cracks in cement sector

Dec qtr results were disappointing as costs escalated and volumes came under pressure

The cement industry presents an intriguing picture. The Q3 (Oct-Dec 2021) saw disappointing results from most companies. This was due to a combination of several factors. Base effects are wearing off since Oct-Dec 2020 saw some recovery. Operating costs escalated sharply especially because power / energy costs shot up. The Q4 (Jan-Mar 2022) may see some demand bounce and that would allow companies to raise prices and pass on costs to some extent. But inflation is significant and will also impact costs.

More importantly, demand recovery next fiscal will be critical. If we ignore the obvious risks of another severe