Cement stocks in focus in Modi 3.0: Birla Corp, JK Cement could give 14-22% return
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Cement prices were under pressure since the beginning of CY24 due to intense competition followed by demand slowdown. Industry players attempted price hikes in Apr-May’24; however, a major part of those hikes was reversed in a couple of days. Resultantly, the all-India average price during Apr-May’24 was flat to marginally up (1%) vs. Mar’24-exit, while it was ~1% lower than 4QFY24 average. After a muted growth in Apr’24, cement demand improved in May’24. We estimate cement volume to grow ~5-6% MoM in May’24. Cement demand is estimated to be subdued in the near term due to the onset of monsoons in the next few weeks across markets. However, demand should rebound strongly in 2HFY25, supported by housing and infrastructure segments. We estimate an industry volume growth of ~5-6% YoY in 1HFY25, followed by ~8-9% YoY growth in 2HFY25.Recently, the newly formed government announced the construction of an additional 30mn rural and urban houses ...