Second, the capacity addition amid fluctuating prices of raw material such as pet coke and coal due to geo-political conflicts provide little room for companies to increase prices.
Another reason is historically, demand for construction increases in a pre-election year as the government increases spending on urban, rural, and low cost housing, and infrastructure. These segments generate 80-90% of the cement demand. Analysts estimate demand to grow at a compounded annual growth rate of 8-9% between FY22 and FY25.
Large cement manufacturers such as Ultratech Cement, Ambuja Cements, Dalmia Bharat and Shree Cement are likely to record higher revenue growth given timely expansion, strong balance sheet and stable cashflow from operations. Their earnings per share (EPS) is expected to increase by 25-58% while revenue may grow by 15-25% year-on-year for FY24.