Cement sector to better days after Q2

Brokers have remained optimistic about the cement package, expecting companies to report solid growth in volumes, revenues and earnings after tax (PAT) in the September quarter of the current fiscal year. However, due to the impact of the monsoon on construction activities, the second quarter has traditionally been a weak quarter for cement producers in terms of demand. The revival in retail and institutional demand as the monsoon recedes, as well as an increase in construction activity due to lower construction raw material prices, is likely to benefit cement companies in the future. India's cement industry profitability (EBITDA/tonne) is expected to bottom out in 2QFY23 and reach new highs by FY25 as most cost increases are expected to be passed on by then.