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Cement : IIFL: Q3 FY11 Sector Preview
Domestic cement consumption continued to remain subdued in last 3 months clocking ~6% yoy
growth as extended monsoon resulted in tepid construction in October and November.
However, price and production discipline led to pricing stability in all the regions except North; we
believe such a discipline, not seen in Q2, would lead to a margin revival on qoq basis.
Ambuja Cements volume is expected to cross 5mtpa (5.5% growth) during Q3 translating into a 7%
revenue growth.
Higher international coal prices would lead to margin pressure across the sector; ACC to report 175bps
decline in margins.
PAT growth would exhibit a mixed performance with ACC likely to report a 9.6% drop in profit.
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