Also Read: Q2FY24 earnings review: Cement companies report strong Q2 numbers, aided by lower rainfall and price hikes Meanwhile, cement prices are trending higher by 3-5%. Price hikes were taken in the month of September and October 2023 with slight roll back in some regions. Sustainability of cement prices is crucial for better profitability as fuel prices are up by 25-30% from their recent lows.
“We remain positive as demand drivers are intact. We expect cement demand to grow at a CAGR of 11-12% over FY23-FY25E. Despite companies adding capacities, we believe that cement demand will outpace the cement supply.
Sustainability of higher prices and trend in fuel prices remains key monitorable," Axis Securities said in a report. Axis Securities picks three cement stocks to buy which it believes are likely to deliver strong earnings growth on the back of robust fundamentals. These stocks are Ultratech Cement, JK Cements and JK Lakshmi Cement.
Ultratech Cement witnessed robust volume growth of 16% and capacity utilization of 75% in the quarter ended September 2023 despite the monsoon impact indicating robust cement demand in the country. The company’s organic capacity expansion plan is progressing well. “We expect the company to report volume growth CAGR of 12% over FY23-FY25E.Read more on livemint.com