Analysts at Nuvama Institutional Equities, based on their latest channel checks, have indicated a positive outlook for the cement sector, citing that both volumes and prices are likely to see an upward trend, supported in part by the low base of FY25E. The brokerage has reaffirmed JK Cement as their top pick within the space.
According to Nuvama, May 2025 has witnessed a rise in cement prices across all regions, with South India leading the momentum, followed by the East, Central, and West. This increase is attributed to a notable improvement in demand.
The improvement in pricing has been reinforced by a pickup in demand, which has been further supported by movement in capital expenditure. While central government capex declined by 12 percent year-on-year (YoY) in the first eight months of FY25, it still registered an overall 8 percent (YoY) increase for the full fiscal.
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Simultaneously, state government capex expanded by 9 percent (YoY) during FY25, and several major states have allocated higher budgets for FY26E.
In southern India, companies have implemented a price hike of Rs 20 per bag in the trade and non-trade segments during May 2025. This follows a significant increase of Rs 40–50 per bag already undertaken in April. Despite this aggressive pricing, dealers in the region are expecting a partial rollback of these hikes by the end of the month, citing subdued demand. However, they also suggest that demand is likely to improve by June 2025.
In the eastern region, demand sentiment has remained soft throughout May. Of the Rs 10 per bag price hike announced earlier in the month, a partial rollback of Rs 5 per bag has already taken place, reflecting the muted uptake in the market.
Meanwhile, the northern region has also experienced weak demand conditions in May 2025, primarily due to ongoing tensions near the India-Pakistan border. Despite this, prices have remained largely steady on a month-on-month basis, with no significant fluctuations observed.
The western region has seen a more moderate price adjustment, with hikes ranging between Rs 3 and Rs 5 per bag. Dealers in this region expect these hikes to sustain, citing a gradual improvement in demand as a supporting factor.
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