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30 Nov 2022
Outlook
- The government may spend on programs such as Pradhan Mantri Awas Yojna, irrigation and road projects, which could aid the demand for cement.
- Demand has picked up from the construction sector as demand picked up post a correction in steel prices.
- Demand can be expected to improve in rural areas following a robust monsoon.
- Future demand could be boosted by the central and state governments gearing up for capital expenditure.
Tailwinds
- Companies are likely to focus on pricing, and this could support profitability.
- Recovery in the housing market and pick-up in infrastructure activities could support demand.
- Pricing may remain stable because of consolidation in the sector, and the high cost of acquisitions.
Key risks
- Increase in freight, power or fuel costs, which is about half of the cost for cement-makers.
(House View aims to regularly provide readers with Kotak Mahindra Mutual Fund’s latest updates on various sectors)
The views discussed here are as on end of Sep 2022.
The information contained herein is extracted from KMAMC internal research/different public sources. All reasonable care has been taken to ensure that the information contained herein is not misleading or untrue at the time of publication. This is for the information of the person to whom it is provided without any liability whatsoever on the part of Kotak Mahindra Asset Management Co Ltd or any associated companies or any employee thereof. Investors may consult their financial experts before making any investment decision.
The article includes statements/opinions which contain words or phrases such as "will", "believe", "expect" and similar expressions or variations of such expressions, that are forward looking statements. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with the statements mentioned with respect to but not limited to exposure to market risks, general and exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. Past performance may or may not be sustained in future.
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