Construction Materials share price target

Cement prices across India remained subdued through October and November 2024, reflecting weak demand conditions. However, a turnaround began in December, driven by government capital expenditure, rural housing growth, and infrastructure projects which helped stabilize prices.

Top Conviction Ideas - UltraTech Cement Ltd, JK Cements Ltd, Ambuja Cements Ltd

Prices to remain under pressure amid consolidation, capacity overhang and subdued government capex
• The cement sector's performance in H1FY25 was characterized by muted volume growth across the board, compounded by a consistent erosion in pricing power. This pricing pressure, driven by sector consolidation and competitive dynamics, saw realization and EBITDA per ton decline further.

Q3FY25 Earnings Preview - CEMENT

Cement prices continued to decline in Q2FY25, extending the downtrend observed over the past few quarters. The sequential drop in prices can be attributed to several factors, including prolonged monsoons, ongoing sector consolidation, and the traditionally weak seasonality of the quarter.

Top Conviction Ideas Cement: UltraTech Cement Ltd; JK Cements Ltd ; Ambuja Cements Ltd

The cement sector is gripped by falling prices, consolidation, and a fierce market share battle
In Q1FY25, the cement sector experienced moderate volume growth across our coverage, but the persistent decline in cement prices continued to erode both realization and EBITDA per ton.

In Q1FY25, the cement industry experienced subdued volume growth YoY and ongoing pressure on cement prices, resulting in lower realizations for cement companies.
Cement prices witnessed pressure in Q1FY25 due to general elections, heat waves, and industry consolidation.

The Q1FY25E top-line degrowth for the cement stocks under our coverage is expected to range from about 4.9% - 17.1% with SHREECEM expecting the least decline and RAMCOCEM with the largest drop QoQ.
Volumes are expected to remain flat YoY but are expected to decline QoQ due to weak seasonality.

Our top positive plays are: UltraTech Cement; Shree Cement; ACC Ltd; Birla Corporation; JK Cement; JK Lakshmi

The cement industry witnessed a jump in volumes which was partially offset by declining cement prices.
In terms of the decline in cement prices, the east region was hit the hardest, followed by the south region.

Top Sector Ideas - Cement Q4FY24

Cement - Q4FY24 Earnings Preview

Cement: Q3FY24 Review Cost savings lift margins

Softer fuel (pet coke) cost aided 560bps YoY EBITDA margin expansion on average for our cement coverage in Q3