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sharply after the relaxation of lockdowns in May-June on the back of strong rural housing demand. While there was a seasonal dip in demand during July-Aug, the channel checks indicate a strong pick-up in demand in September. Demand recovery has been strong in the East, Central and North, and remains weak in the South...

Average cement prices at an all India level is down by 1.4% MoM in Oct-20. But our dealer interaction suggests that the price could increase by month end, as dry season is approaching. As on Oct-20, avg cement price is down by 1% at all India level vs. March-20. Baring south and north region, Oct-20 cement prices is down vs exit prices of March-20 in other three regions. Cement prices in East and West is down 5% vs March-20. Cement industry production decreased by 15% YoY in August 2020 (latest data available). Cement demand decline is due to monsoon and the local lockdowns. But region wise, cement demand is recovering in East /...

Our channel check suggests, average cement prices at an all India level is down by 2% MoM in Sept-20. After factoring Sept-20 weakness, avg. cement price is up 1% at all India level vs. March-20 and is up 3% vs. Sept-19 cement prices. We understand weakness in the cement price is seasonal due to softness of cement demand in monsoon. India has received 7% higher rainfall in this monsoon season versus past averages. Cement production in India for the month of July-20 (Latest available data) has decreased by 14% YoY to 24mt, which is more than June-20 decline of 7% YoY. This is due to increase in the intensity of rainfall in July/Aug-20...

Our initial evaluation of the impact of novel coronavirus, or COVID-19, on the cement sector, as highlighted in our previous report (Cement Sector Update)

After steep hike in April and May, prices in AP/Telangana fell by Rs15/bag MoM South due to usual increase in competition. (Rs/bag) Prices in Trivandraum fell by Rs5/bag MoM w hile prices in Chennai inched up...

Our channel check suggests, average cement prices at an all India level is marginally down by 0.6% MoM in Aug-20. As on Aug-20, avg cement price is up 3% at all India level vs. March-20. And baring west region, Aug-20 cement prices is up vs exit prices of March-20 in all the other four regions. Cement industry production decreased by 7% YoY in June 2020 (latest data available). Cement demand has seen sharp improvement in June-20 vs May-20 and is driven by trade sales. But given the monsoon, we expect the demand to remain soft now. We are modeling in cement demand at -14% YoY in FY21E with H1FY21 demand at -26% YoY and...

are expected to fall 30% YoY in the quarter. Led by lower fall in May at 12% YoY and 1% YoY growth in June, companies were able to restrict the impact of 80% fall in April to 30% for the quarter. We remain positive on the sector in wake of improving demand outlook, sustainable price discipline and reasonable valuations. Ultratech cement (UTCEM), Ambuja cement (ACEM) and JK Lakshmi cement (JKLC) remain our top picks in the sector. Production recovered strongly in May: Based on the DIPP data, cement production slumped by 54% YoY in Apr-May'20 on a base of +2.5% YoY growth....

are expected to fall 30% YoY in the quarter. Led by lower fall in May at 12% YoY and 1% YoY growth in June, companies were able to restrict the impact of 80% fall in April to 30% for the quarter. We remain positive on the sector in wake of improving demand outlook, sustainable price discipline and reasonable valuations. Ultratech cement (UTCEM), Ambuja cement (ACEM) and JK Lakshmi cement (JKLC) remain our top picks in the sector. Production recovered strongly in May: Based on the DIPP data, cement production slumped by 54% YoY in Apr-May'20 on a base of +2.5% YoY growth....

The Indian cement sector, after a muted beginning in FY20, started showing signs of a revival since November 2019.

Cement prices have increased QoQ in 4QFY20, aided by demand recovery. Further, as fuel prices continue to fall and diesel price remains stable, margin tailwinds appear sustainable for the industry. In our view, cement companies with large sales exposure to north/central/Gujarat markets should gain the most. In this report, we deep dive into operating performance of 19 listed cement companies to compile industry trends. These companies comprise ~75% of the Indian cement industry and hence largely reflect the industry trend. Our analysis suggests that despite subdued demand in the past three qtrs, industrys operating margin has scaled up to decade high. This is driven by strong pricing in the north/central/Gujarat markets, steady fall in pet-coke prices and low diesel prices.