Pharma sector to shine; volume and value growth make a win-win situation for cement cos

In FY20, key most focused facts for the cement sector would be crude oil prices movement, pet coke prices and demand progress in Q2FY20

Strong volume and value progress during the last year showed to be a win-win condition for the cement sector. Volume progress was around 12 %, above expectations led by a sharp rise in infra, housing and reasonable housing spend.

We expect it to further raise 5-6 %, which is fairly decent due to a greater base in FY20. Though, it should be kept in mind that incremental aptitude would be around 18-20 MTPA, while incremental creation would be greater by 24-25 MTPA, offering pricing power and constancy to companies.

Last year, the capacity used for the sector was supposed in the range of 68-69 % but really it came at 71 % which, we expect too high 72-73 % in FY20 because of incremental demand and production.

Pharma sector to shine after dwindling for years, Pricing strain from the US has toned down and the channel association has already made a new normal. Companies into expertize drugs, injectable, and biosimilar are estimated to profit in the long run after dwindling for years.