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Higher base caps YoY volume growth…
Dispatches by cement majors grow ~9% YoY in March 2011
The cement majors, holding ~50% of the total Indian cement industry
capacity, reported an aggregate dispatch growth of ~9% YoY for March
2011. On an MoM basis, overall dispatches were higher ~11% on the
back of demand pick up with higher number of operating days in March
against February. However, we expect ~4% YoY growth in March 2011
for the total industry on account of higher base in March 2010.
Major cement players such as UltraTech, ACC, Ambuja, Jaypee and JK
Lakshmi Cement reported growth in dispatches on a YoY basis. JK
Lakshmi clocked ~29% YoY growth in dispatches during the month while
Jaypee reported ~22% YoY growth. ACC and Ambuja Cement reported a
volume growth of ~14% and ~7% YoY, respectively. However, on an
MoM basis, the major players namely ACC, Ambuja, UltraTech and JK
Lakshmi reported a noteworthy growth in dispatches number by 9%,
16%, 14% and 16%, respectively (due to higher operating days). The YoY
growth in sales volume is expected to be muted on account of higher
base during the month last year.
Cement prices to remain firm on continued supply discipline
Cement prices have shot up significantly by ~| 30-50 per bag in the last
three months across regions as subdued demand and rising input costs
forced cement manufacturer to maintain supply discipline across regions.
Currently, prices in Delhi are hovering at ~ | 280/bag while prices in
Kolkata touched ~| 300/bag. In Mumbai, per bag price is at | 280 while in
Hyderabad and Chennai, prices increased to | 265 and | 275, respectively.
Industry outlook
Total cement consumption is expected to grow at ~4% YoY in FY11E as
against growth of 4.2% in April–February FY11. For FY11E, the capacity
utilisation rate is expected to come down to 76% from 87% in FY10 as we
expect ~44 MTPA of effective capacity addition during the year as against
~8 MTPA of incremental demand. However, the capacity utilisation rate is
expected to improve to 77% in FY12E on account of lesser effective
capacity addition of ~13 MTPA during the year compared to an increase
in demand of ~14 MTPA. We expect prices to remain firm in Q4FY11E
and Q1FY12E on the back of a pick-up in demand during the period,
which is known as the best period for construction activities.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Higher base caps YoY volume growth…
Dispatches by cement majors grow ~9% YoY in March 2011
The cement majors, holding ~50% of the total Indian cement industry
capacity, reported an aggregate dispatch growth of ~9% YoY for March
2011. On an MoM basis, overall dispatches were higher ~11% on the
back of demand pick up with higher number of operating days in March
against February. However, we expect ~4% YoY growth in March 2011
for the total industry on account of higher base in March 2010.
Major cement players such as UltraTech, ACC, Ambuja, Jaypee and JK
Lakshmi Cement reported growth in dispatches on a YoY basis. JK
Lakshmi clocked ~29% YoY growth in dispatches during the month while
Jaypee reported ~22% YoY growth. ACC and Ambuja Cement reported a
volume growth of ~14% and ~7% YoY, respectively. However, on an
MoM basis, the major players namely ACC, Ambuja, UltraTech and JK
Lakshmi reported a noteworthy growth in dispatches number by 9%,
16%, 14% and 16%, respectively (due to higher operating days). The YoY
growth in sales volume is expected to be muted on account of higher
base during the month last year.
Cement prices to remain firm on continued supply discipline
Cement prices have shot up significantly by ~| 30-50 per bag in the last
three months across regions as subdued demand and rising input costs
forced cement manufacturer to maintain supply discipline across regions.
Currently, prices in Delhi are hovering at ~ | 280/bag while prices in
Kolkata touched ~| 300/bag. In Mumbai, per bag price is at | 280 while in
Hyderabad and Chennai, prices increased to | 265 and | 275, respectively.
Industry outlook
Total cement consumption is expected to grow at ~4% YoY in FY11E as
against growth of 4.2% in April–February FY11. For FY11E, the capacity
utilisation rate is expected to come down to 76% from 87% in FY10 as we
expect ~44 MTPA of effective capacity addition during the year as against
~8 MTPA of incremental demand. However, the capacity utilisation rate is
expected to improve to 77% in FY12E on account of lesser effective
capacity addition of ~13 MTPA during the year compared to an increase
in demand of ~14 MTPA. We expect prices to remain firm in Q4FY11E
and Q1FY12E on the back of a pick-up in demand during the period,
which is known as the best period for construction activities.
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