JPMorgan highlights varied responses to recent cement price hikes across India, with increases ranging from ₹5 to ₹50 per bag. The hikes were notably higher in the South and East, while demand and pricing in the North and West remain subdued. To validate these trends, JPMorgan reached out to dealers across the country, many of whom expressed cautious optimism. Dealers remain uncertain about the sustainability of these price hikes, as they may need to be rolled back if demand fails to pick up meaningfully.
Despite these challenges, JPMorgan remains constructive on UltraTech Cement (UTCEM) due to its consolidation benefits and ACC for its valuation advantages and better price momentum in the South. Both companies are seen as relatively better-positioned in the current environment. The brokerage emphasizes that cement producers must address muted demand growth and ensure the implemented price hikes are maintained without hampering market dynamics.
