Some headwinds emerge for India's cement sector amidst high valuations

The capex of the past year or two will probably result in over-supply

There are confusing reports and advisories about the cement sector. While the space has seen speculative support on the basis of the Budget’s infrastructure thrust, there are several negative factors surfacing as well. The sector may be overcrowded with a fair number of large players and the entry of the Adani Group through its two key acquisitions, followed by the takeover of majority stake in Sanghi Industries via Ambuja Cements. Since every major player is in expansion mode, there could be a capacity surplus and hence, price wars.

All this is known and largely discounted. But the latest channel