Cement stocks experienced a notable surge on Monday, rallying over 5% following a favourable outlook from Jefferies, driven by signs of demand recovery, increased government capital expenditure, and stabilising price trends. Leading the charge, JK Cement soared by 5.3%, followed by UltraTech Cement, which climbed 3.82% to become the top performer on the Nifty 50. Other major players, including Dalmia Bharat and Grasim Industries, posted gains exceeding 3%, while Shree Cement and Ambuja Cement advanced by 2.77% and 1.32%, respectively.
After a year of consolidation with limited upward movement, the Jefferies report with positive price feedback triggered a revaluation of cement stocks,” explained Vikas Jain, Head of Research at Reliance Securities. Jefferies reported that cement prices remained stable in November, with earlier declines bottoming out. The industry is now eyeing price hikes of ₹10-15 per bag in December, signalling confidence in recovering demand and improved market conditions.
Jefferies’ optimism is bolstered by moderate demand growth observed in October and November. The brokerage anticipates a stronger recovery in the fourth quarter of FY24, propelled by an expected uptick in government infrastructure spending. Analysts foresee a robust rebound in the second half of FY25, underpinned by significant government investments in infrastructure projects. The cement industry is poised to benefit from these developments, with long-term prospects aligning with India’s focus on infrastructure-led economic growth.
