New Delhi, March 20 -- The diesel price cut of Rs.2 per litre after a long gap is positive news for cement stocks. Roadways form a significant portion, over 50%, of cement makers' transport mix, so movement in diesel prices is crucial to gauge how freight costs will pan out.

Additionally, the costs of imported petroleum coke and coal, which are the key fuels required to manufacture cement, have also softened from recent peaks. Their costs are likely to remain stable hereon.

The benefits of low-cost inventory have helped cement makers improve their operating margins in recent quarters. But in the backdrop of sustained pressure on cement prices, lower input costs may not be of much help to the earnings outlook.

Cement prices have dropped...