With pickup in volume, cement stocks offering an opportunity
The cement industry is looking for brighter days ahead, which at present has been going through a consolidation phase. In India, cement demand comes from four key segments -- housing, infrastructure, commercial and industrial. There are expectations that cement demand would pick up in the affordable and rural housing segments and also from the infrastructure sector, primarily road and irrigation projects. The industry is also going to benefit from government initiatives such as The cement industry is looking for brighter days ahead, which at present has been going through a consolidation phase. In India, cement demand comes from four key segments -- housing, infrastructure, commercial and industrial. There are expectations that cement demand would pick up in the affordable and rural housing segments and also from the infrastructure sector, primarily road and irrigation projects. The industry is also going to benefit from government initiatives such as expansion of capacity in the railways and improving facilities for handling and storage to ease cement transportation and reduce costs. In order to tap industry demand, many cement companies are adopting multiband strategies and have also been expanding market base. Besides, the strategy to deliver faster to customers has increased growth of sales volume in recent times. The recent pickup in demand continued growth from Andhra Pradesh and Telangana, several eastern states as well as western Indian markets, led by execution of infrastructure projects, has supported volume growth. Sustained volume growth, despite price hikes, indicates On the flip side, a spike in pet coke price emerges as a key challenge for the industry. Cement, power and steel industries NSE -4.04 % are predominant consumers of pet coke. And surging prices of petroleum coke in a challenging pricing environment has been restricting operating margin growth of many cement companies. To note, the pet coke market in India has grown at a compounded annual growth rate (CAGR) of around 23 per cent over last five years.
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