The revenue outlook for the cement sector is biased to the upside in H2’24. This view on sector sales is supported by projected improvements in public sector demand, stemming from the Renewed Hope Infrastructure Development Fund (RHIDF) and other government-led infrastructure projects. In addition, the elevated pricing environment will serve as an accretive benefit. Elsewhere, with severe cost pressures projected to linger in 2024 due to higher energy & haulage costs, FX losses, and reversion to a higher effective tax rate for cement players, margins are likely to be pressured. The upside risk to our expectation stems from players' shift to alternate fuels, which could potentially ease energy cost pressures in the medium to long term.
