HomeMarket NewsStocks NewsCentrum Broking decodes impact of the first decision from Modi Cabinet 3.0 on cement stocks
Centrum Broking decodes impact of the first decision from Modi Cabinet 3.0 on cement stocks
Mangesh Bhadang, Senior VP of Research at Centrum Broking listed Shree Cement as his top pick among large caps, and Birla Corp and JK Lakshmi among mid caps.
The Pradhan Mantri Awas Yojana (PMAY) has been a key driver of cement demand in the past, and the new government's first decision could potentially boost demand by 200-250 basis points, says Mangesh Bhadang, Senior VP of Research at Centrum Broking.
Bhadang expects overall 5-6% growth in cement volumes during April-March 204-25 even though the first half will be weak due to election and monsoons.
The Union Cabinet led by Prime Minister Narendra Modi on June 10 approved government assistance for construction of three crore houses under the PMAY scheme.
“In the first half of last year, demand growth was almost 16% and because of elections and timely monsoon, we are expecting that demand is going to take some time before it picks up. So, the second half is where it will pick up,” Bhadang told CNBC-TV18.
However, due to the high base from the previous year, growth would likely remain lower at around 5%.
He anticipates a return to an 8-9% volume growth trajectory starting in April-March 2025-26.
Demand conditions for cement have been gradually improving. While January was weak due to weather conditions and pollution-related restrictions, growth rebounded in February, and March emerged as the strongest month in terms of demand.
Since the demand will largely be from the trade segment, the pricing will be at par, Bhadang said.
Also Read: Union Cabinet clears way for building 3 crore houses under PMAY
Bhadang's top picks in the sector include Shree Cement among large caps, and Birla Corp and JK Lakshmi among mid caps.
For more details, watch the accompanying video
Catch all the latest updates from the stock market here
Bhadang expects overall 5-6% growth in cement volumes during April-March 204-25 even though the first half will be weak due to election and monsoons.
The Union Cabinet led by Prime Minister Narendra Modi on June 10 approved government assistance for construction of three crore houses under the PMAY scheme.
“In the first half of last year, demand growth was almost 16% and because of elections and timely monsoon, we are expecting that demand is going to take some time before it picks up. So, the second half is where it will pick up,” Bhadang told CNBC-TV18.
However, due to the high base from the previous year, growth would likely remain lower at around 5%.
He anticipates a return to an 8-9% volume growth trajectory starting in April-March 2025-26.
Demand conditions for cement have been gradually improving. While January was weak due to weather conditions and pollution-related restrictions, growth rebounded in February, and March emerged as the strongest month in terms of demand.
Since the demand will largely be from the trade segment, the pricing will be at par, Bhadang said.
Also Read: Union Cabinet clears way for building 3 crore houses under PMAY
Bhadang's top picks in the sector include Shree Cement among large caps, and Birla Corp and JK Lakshmi among mid caps.
For more details, watch the accompanying video
Catch all the latest updates from the stock market here
(Edited by : Shweta Mungre)
First Published: Jun 11, 2024 11:55 AM IST
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