Gradual recovery for cement firms

Q3 profit expected to fall and near-term outlook remains sluggish

Cement was one of the most impacted of sectors from demonetisation. 

Companies had been anticipating a pick-up in demand and looking at price increases after the festive season. Instead, with demonetisation, there was a severe volume fall in November. They gained a bit in December, helped by some price cuts. Overall, the December quarter could be a washout, volumes and realisations both taking a hit on a sequential basis. Though, year-on-year, these could be up due to earlier price hikes. Realisations in north and central India might benefit some, such as Shree Cement and JK Cement.

Given the negatives, cement stocks have