ICICI Securities: Cement Demand Improves In September 2020; Prices To Follow Soon
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ICICI Securities Report
Our channel checks suggest the cement industry may post positive volume growth in September 2020 after six consecutive months of YoY decline, led by sharp demand uptick in East and aided by YoY favourable base of South.
August 2020 volumes likely declined by mid-single digit YoY - broadly similar to those seen during June-July 2020.
Average pan-India prices were up 2% YoY in August 2020 even as prices fell 3-4% month on month across most regions coupled with higher fall of Rs 2,530 per bag in the non-trade segment.
Improving demand and increasing costs would necessitate price increase going ahead. We expect volumes and prices to improve hereon.
Recent under performance of cement stocks during the seasonally weak monsoon period is an opportunity to accumulate, in our view.
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