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Cement Prices Firm, Demand Improves After A Slight Dip: Emkay Global

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Cement volumes likely increased in high-teens MoM in Jun'21 (up YoY in high single-digits), owing to the easing of restrictions and pre-monsoon/pent-up demand, Emkay Global Financial Services.

 

"In Q1FY22, industry volumes likely declined in mid-teens QoQ, though significantly up YoY thanks to a low base. Average pan-India prices rose marginally MoM (flat YoY) in Jun'21. Prices were likely up 6% QoQ (broadly flat YoY) in Q1FY22, which should largely mitigate the impact of various cost escalations during this quarter, in our view," the firm said in a report on the latest update in the cement sector.

According to Emkay Global industry volumes likely increased in high-teens MoM (up in high single-digits YoY) in Jun'21 and recovered to Apr'21 levels, owing to the easing of restrictions and pre monsoon/pent-up demand. On a MoM basis, volumes likely grew >20% MoM in the North region, in high-teens in the East and South regions and in low double digits in the West and Central regions.

Cement Prices Firm, Demand Improves After A Slight Dip: Emkay Global

"Industry volumes likely declined in mid-teens QoQ in Q1FY22, though significantly up YoY due to a low base. We expect a sustainable demand recovery in volumes in coming quarters on the back of gradual relaxations in lockdowns, expectations of construction activities gaining momentum post monsoon, low base of last two years, government focus on infrastructure spends, and strong Jun'21 exit. We model demand growth of 11.5% YoY," Emkay Global Financial Services said in a report.

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