"The demand environment has remained weak on account of a slower than expected execution of infrastructure and housing projects (especially rural housing demand has remained weak) in all regions except the eastern region. The major cities of the western, southern and northern regions witnessed a sluggish demand environment in June this year because of the absence of infrastructure projects and a slow recovery in the private housing segment. Cement dealers are of the view that the demand is likely to recover in the second half of the year.
"Outlook for demand environment:"The firming up of cement prices in the central and southern regions indicates an improving business environment which is positive for the south-based cement players like India Cements and The Ramco Cements . The price of cement is likely to remain stable at the current level or decline by Rs10-15 per bag in selected cities. The cement prices are stabilising (in fact, the prices are firming up in certain regions) and the demand outlook is also improving, given the cyclical upturn in the economy and the expected policy push by the new pro-development government at the centre that would drive investments in the infrastructure sector. Thus, the blended realisations could look up once the demand environment improves and the volume growth picks up, resulting in a better capacity utilisation level. We, therefore, maintain our positive view on the cement sector", says Sharekhan research report.
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