After subdued volumes between April and October 2019, the cement industry had started witnessing a demand pickup from November.
But the good times did not last long due to the covid-19 outbreak, and the resultant demand slump. In keeping with the changes, analysts at Emkay Global Financial Services Ltd now expect an industry volume decline of 2.4% in FY20, compared to 13.3% growth in FY19.
True, shares of cement firms reflect the change in business conditions, declining sharply along with the broader market. No doubt, valuations are undemanding.
Emkay analysts said: “Many cement companies under our coverage are trading at lower one year forward EV/Ebitda multiples compared with their historical averages.