Infra push to support cement volume

Cement stocks have corrected about 10-15 percent from their recent peaks in May over concerns around pricing roll-back in June and demand moderation following the elections. > Cement volume rose 13 percent in FY19. FY20 started in a subdued note following the general election and the monsoon but is expected to improve in H2. Capacity utilization reached 78 percent in Q4, the highest level in the last 28 quarters. Utilization level is expected to grow further as the industry is expected to grow at around 8-10 percent. > Indonesian coal prices, a key raw material, has fallen 14 percent in the first two months of the fiscal year. International thermal coal prices are down 21 percent sequentially. > With international coal/petcoke price declining, it has been an added positive as costs has reduced. Margins started to improve in Q4 FY19 and it is expected the trend will continue.