Firm outlook for cement despite lean Q2

Energy costs may limit September quarter profitability, but rising demand and lower capacity additions bode well for future prospects

Cement demand and pricing trends in the monsoon-impacted September quarter (Q2 of FY18) have been a mixed bag. But, a closer look suggests the recent past as well as future prospects of many cement companies are in good shape, and investors can use any correction in the share price as a buying opportunity.
 
While cement prices in eastern and western India have surprised with year-on-year (y-o-y) gains, it was not so in other regions. Hence, average all-India cement prices are pegged to have been flat to up three per cent y-o-y in Q2, based on various estimates. But, if one were to factor in