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Cement's strength will be tested if demand, volumes fail to pick up

Firm realisation and lower costs bode well for profitability

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After April sales remained significantly impacted by lockdown at just 15-20 per cent of normal, demand started improving and was better-than-expected in May

Ujjval Jauhari

3 min read Last Updated : Jun 19 2020 | 2:39 AM IST

Stocks of major cement manufacturers such as Shree Cement, UltraTech Cement, ACC and Ambuja Cements have rebounded up to 39 per cent since March-April lows as easing of lockdown helped cement demand rebound, and in turn kept realisations firm. This, coupled with benign input prices has augured well for profitability. However, if volumes fail to pick up, it could again weaken investor sentiment.

After April sales remained significantly impacted by lockdown at just 15-20 per cent of normal, demand started improving and was better-than-expected in May aided by pent-up demand of previous two months, and decent traction in rural markets.

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