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Cement demand improves, but pricing remains muted, said Motilal Oswal Financial Services (MOFSL) in a report.

"Our channel checks indicate the seasonal uptick in demand is playing out, with volumes bouncing back strongly from the weakness seen in the first few weeks of January," the report said.

The report cited that prices have improved 1-2 per cent on a MoM basis in North and West India, while the average pan-India price is down 2 per cent QoQ thus far in Q4FY21.

"Cost inflation is also a concern in the near term as petcoke, coal, and diesel prices are up 71 per cent, 4 per cent, and 26 per cent YoY, respectively."

"Therefore, we expect margins to decline sequentially for the industry, but they should still be higher YoY. We expect our coverage EBITDA to grow >20 per cent YoY in 4QFY21, driven by 18 per cent YoY growth in volumes."

Besides, the report said that off-take has been strong in February, led by continued healthy demand in east, north, central India and revival in western region.

However, it has remained weak in the southern region.

"Demand in East has been particularly strong, supported by pre-election spending in West Bengal and strong industrial or infra demand in Odisha,".

"Demand in North and Central has also improved in February - supported by a receding winter season, which has improved the pace of construction work."

Furthermore, the report said demand in the western region has rebounded strongly, led by recovery in urban real estate and construction.

"Maharashtra volumes are now on the rise for the first time since the pandemic."

"Demand in South has remained weak on a YoY basis, but improved sequentially, driven by a strong uptick in Andhra Pradesh and Telangana."