Q3FY22 likely to be weak for cement cos, but prospects look good thereafter

Cement demand has not picked up after the festive season, and sales volumes in Nov 2021 are 18-20% lower than Oct 2021 levels, which is far lower than the historical average of 6%

The cement industry always sees seasonal variations in demand due to the weather. The Q3 (Oct-Dec) is normally stronger than Q2 because the South-East monsoon is over, or receding. However this year, there were late rains. This makes it likely that Q3 will be weaker in terms of demand than normal but Q4 is likely to see a recovery. The industry has, however, received a break in terms of input costs, in November, which could help it maintain margins that were being stretched.

Cement demand has not picked up after the festive season, and sales volumes in November 2021 are