Cement stocks riding high on hopes of higher demand, capex push

Price wars led by increasing capacities and aggressive competition may hit prospects

The cement industry continues to present several puzzles to investors. There’s consolidation going on, with current capacity in surplus to demand and the nation-wide entry of the Adani Group through its acquisitions of two key players.

At the same time, every major player is in capex mode and expanding capacity. The optimists point to the demand that will be created by the infrastructure thrust at both Centre and state level. The pessimists say demand is still weak in the medium-term and there are apprehensions that a price war could impact every company’s margins.

The fourth quarter of the 2022-23 financial