As geopolitical tensions rise and input costs rise, cement stocks have been in focus. Mangesh Bhadang, Research Analyst at Nirmal Bang Institutional Equities discussed the outlook for the sector.
Currently, it is a desperate situation in the sector wherein all the drivers of business – demand, pricing and cost – are in the negative territory, he said. According to him, cement sector has shown resilience whenever there was a crisis, so there is scope for further improvement.
Demand is relatively better, it is moderate, he said.
An unprecedented rise has been seen in operating cost. On power and fuel side, on electricity side, on freight because of diesel, on packing cost have been hit across the board and high growth has been seen in operating cost in Q3FY22, he said.
In Q3FY22, there has been Rs 700 increase in operating cost. The way coal is moving up, it is expected to continue for some more time, he said. He is looking at another Rs 300-400 increase starting from Q1FY23.
For the full interview, watch the accompanying video
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