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Summary:

JM Financial predicts that cement consumption in India will grow at a CAGR of 7-8% between FY25E and FY27E. Despite a temporary slowdown in FY25E, the sector is expected to see rapid growth, driven by strong demand fundamentals and structural changes within the industry. Key growth drivers include significant infrastructure development and increasing construction activity, while cost optimization and risk-reduction efforts will help ensure long-term profitability.

 

The report emphasizes that investors should focus on structural changes that enhance long-term profitability rather than short-term cement price fluctuations. After a period of stability, cement prices increased by 3% month-on-month in December 2024, reaching a 10-month high. A 5-6% sustainable price hike is necessary to boost asset returns. The cement sector is expected to add 150 million tonnes of capacity by FY27E, with stable utilization rates supporting sustained growth.

 

Source: IBEF 

 

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