Cement Sector Check: Busy Season Demand Kicking In, Price Hikes To Follow, Says Motilal Oswal

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Motilal Oswal Report

Our channel checks indicate the seasonal uptick in demand is playing out as expected, with volumes bouncing back in the last few weeks from the weakness seen in November (due to festive holidays).

While prices weakened in December (falling 3% month-on-month), we expect a recovery in the next few weeks as peak season demand sets in.

Cost inflation from higher fossil fuel prices (petcoke, coal, and diesel) should be offset, in our view, by price hikes, keeping margins in Q4 FY21 at elevated levels.

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