Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cement
n Though on a yoy basis our cement coverage universe is expected to see a 5.9% earnings decline in Q4FY11,
sequentially the performance is expected to improve sharply led by successive price hikes taken in Jan-March 2011.
All India cement dispatches for the first 2 months of Q4FY11 have grown at 4.9% yoy showing some signs of recovery
from the flattish growth witnessed in Q3FY11. Cement prices continued their uptrend and averaged at Rs258/bag for
the quarter up 9.3% yoy and 8.6% qoq led by pricing discipline exercised by cement producers across regions.
n We expect cement companies under our coverage to report topline growth of 9.4% yoy. Pure cement sales are
expected to grow 9%yoy led by 1.8% growth in volumes and 7.2% yoy improvement in realizations. Volumes for south
based players however are expected to decline by 14.3% yoy due to production cuts exercised to maintain prices and
the slow pick up in demand in southern region.
n With hyper inflation in energy prices (international coal prices averaging USD120) total cost per tonne is expected to
increase by 12.3% yoy. Pure cement EBDITA is expected to register a decline of 5.5% yoy with EBIDTA/t at Rs887 (-
7.1% yoy). Consequently aggregate EBIDTA is expected to decline by 5.2% yoy with margins shrinking 350 bps to
22.7%. Further rising interest costs (+30.7% yoy) are expected to drag down net profit by 5.9% yoy.
n We expect cement prices to remain buoyant at least for the next few quarters, driven by seasonality in demand and
the pricing discipline across regions. However amidst supply issues and related pricing pressures that the sector is
witnessing, the pivotal concern now is the revival of demand which could drive any sort of upgrades for the sector.
n Maintain our NEUTRAL stance on the sector. Maintain negative stance on, Ultratech, Ambuja Cement and India
cements, remain positive on ACC & Grasim.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cement
n Though on a yoy basis our cement coverage universe is expected to see a 5.9% earnings decline in Q4FY11,
sequentially the performance is expected to improve sharply led by successive price hikes taken in Jan-March 2011.
All India cement dispatches for the first 2 months of Q4FY11 have grown at 4.9% yoy showing some signs of recovery
from the flattish growth witnessed in Q3FY11. Cement prices continued their uptrend and averaged at Rs258/bag for
the quarter up 9.3% yoy and 8.6% qoq led by pricing discipline exercised by cement producers across regions.
n We expect cement companies under our coverage to report topline growth of 9.4% yoy. Pure cement sales are
expected to grow 9%yoy led by 1.8% growth in volumes and 7.2% yoy improvement in realizations. Volumes for south
based players however are expected to decline by 14.3% yoy due to production cuts exercised to maintain prices and
the slow pick up in demand in southern region.
n With hyper inflation in energy prices (international coal prices averaging USD120) total cost per tonne is expected to
increase by 12.3% yoy. Pure cement EBDITA is expected to register a decline of 5.5% yoy with EBIDTA/t at Rs887 (-
7.1% yoy). Consequently aggregate EBIDTA is expected to decline by 5.2% yoy with margins shrinking 350 bps to
22.7%. Further rising interest costs (+30.7% yoy) are expected to drag down net profit by 5.9% yoy.
n We expect cement prices to remain buoyant at least for the next few quarters, driven by seasonality in demand and
the pricing discipline across regions. However amidst supply issues and related pricing pressures that the sector is
witnessing, the pivotal concern now is the revival of demand which could drive any sort of upgrades for the sector.
n Maintain our NEUTRAL stance on the sector. Maintain negative stance on, Ultratech, Ambuja Cement and India
cements, remain positive on ACC & Grasim.
No comments:
Post a Comment