The cement sector is set to move to a high growth trajectory over next three or four years ('GDP correlation of 1.2x') led by an improved macro outlook and through the government's policy push, according to ICICIdirect.

''We believe the industry's capacity utilisation bottomed at ~69% in FY14. We think low capacity addition and demand recovery should lift utilisation levels from hereon given the cyclical upturn in the economy coupled with an expected policy push to drive investments in the infrastructure sector. By driving increased cement usage in sectors like road, power and irrigation, we believe the industry can achieve the full potential of cement demand growth over the next three or four years,'' it said.

''We forecast pan-India utilisation at 78% by FY17E. Excluding south, utilisation levels for the industry are expected at over 85% levels by FY17E that could offer pricing power to players,'' said ICICIdirect.

''We continue to prefer UltraTech in the large cap space. Among midcaps, we like JK Cement, JK Lakshmi & Heidelberg Cement due to their presence in strong regions and well timed expansions while India Cement can be a major beneficiary of a strong demand revival in Andhra Pradesh,'' it opined.

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