Valuations don’t provide strength to cement stocks
Live MintFor cement companies, the December quarter was a mixed bag. “Fuel consumption costs for cement players declined 5-15% quarter-on-quarter to ₹1.50- ₹R2.05/Kcal in Q3FY24," said a Motilal Oswal Financial Services report. In a bid to save operating costs and reduce their carbon footprint, cement companies are increasingly adopting green energy and alternative fuels in their overall fuel mix. “Given that industry has missed taking price hikes in Feb’24 and March-end typically is seen as a ‘volume-push’ month, price recovery can now be expected only in Q1FY25," said an ICICI Securities report dated 14 February. It is worth noting that industry bellwether UltraTech Cement Ltd has revised its growth capital expenditure guidance to ₹9,000 crore per annum each in FY24/FY25 versus earlier guidance of ₹6,000-7,000 crore.
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