Brokerage houses Shree Cement, Orient Cement, JK Cement, Utratech, ACC, Dalmia India, Star Cement and Birla Corp.
Over the last few months, there has been widespread instability in cement reserves due to various reasons. After the slow performance in November, the demand for cement in December was a strong pick-up and this rally continued till the end of January. Elections in five states in February disrupted construction in a large part of India due to a shortage of workers. Since then, the cement sector has seen a revival in March, especially since the second fortnight.
According to a report by JM Financial, overall earnings in the cement sector could see a marginal increase of 1 per cent in the fourth quarter due to a larger base than last year. Similarly, Axis Securities said in a report that rural demand, which was in the forefront last year, has not yet seen a recovery, due to which demand for cement has remained relatively slow. However, in the fourth quarter, demand is expected to increase somewhat as construction activity in urban and semi-urban areas increases.
Market experts say that the demand for cement will increase in the first quarter of 2023. At this time, the demand for cement will increase due to the activities of government projects. In addition, strong demand from the real estate sector and increasing demand in rural areas after a good rabi crop is a good sign for the cement sector.
JM Financial said in its report that the impact of rising pet coke and coal prices could be visible on the performance of companies for the first quarter of 2023. In the fourth quarter of FY 2022, companies’ costs may also increase
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According to a report by Motilal Oswal, the EBITDA of cement companies could decline by 23 per cent year-on-year. The average operating margin of cement companies could fall to 6.5 per cent year-on-year. Based on this analysis, brokerage house Dr. Shree Cement, Orient Cement, JK Cement, Utratech, ACC, Dalmia India, Star Cement and Birla Corporation But they are bullish.