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Will the rally in cement stocks sustain given challenges to demand growth?

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Cement manufacturer Birla Corporation Ltd’s shares vaulted 12% on Tuesday. The stock followed the trend of peers whose shares rose on the back of decent results in the March quarter.

ACC Ltd, Ambuja Cements Ltd, UltraTech Cement Ltd and Shree Cement Ltd are up 7-13% since the lockdown was partially eased on 21st April. What is driving this optimism amid macroeconomic gloom? To begin with, investors are positively surprised by the sustained increase in cement prices in May.

A report by Emkay Global Financial Services Ltd pointed out, “Our channel checks indicate that cement prices have been increased by ₹20-30/bag in the North, Central and West markets; ₹20-50/bag in the East markets……and ₹40-90/bag in the South region." (a bag of cement

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