Morgan Stanley has said that while demand in the cement sector remains lukewarm, pricing trends are solid, providing a degree of support to earnings in the near term. The brokerage expects sequential weakness in the second quarter of FY26 due to the monsoon season, but remains optimistic about a demand rebound in the second half of the year. It believes the combination of stronger demand recovery post-monsoon and cost improvement initiatives will drive a meaningful improvement in sector earnings for FY26.
The brokerage said it prefers pan-India franchises with the ability to sustain cost efficiencies and capitalise on regional growth, adding that such players are best placed to benefit from the next upcycle in demand. Morgan Stanley noted that the sector outlook remains constructive, provided cost-saving measures align with an eventual recovery in volumes, which it expects to gain momentum in the latter part of the fiscal year.
Disclaimer: The views and recommendations made in this article are those of Morgan Stanley. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
