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December dispatches grow ~12% MoM…
Cement majors report aggregate dispatch growth of ~12% YoY
Major cement players have reported an aggregate increase of ~12% YoY
in cement dispatches in December 2011 mainly because of a lower base
last year and a pick-up in demand during the month post monsoon. On an
MoM basis also, cement dispatches have increased ~12% due to a pickup
in construction activities across regions. Jaypee outperformed other
players with ~29% YoY growth in dispatches followed by Shree Cement
with ~17% YoY. Heidelberg and UltraTech reported YoY growth of ~13%
and ~10%, respectively, in dispatches while ACC reported ~9% YoY
growth. JK Lakshmi and Ambuja Cement reported growth of 2.5% YoY
and 5.5% YoY, respectively. On an MoM basis, aggregate dispatches
increased ~12%, due to a pick-up in demand post monsoon and festive
season. UltraTech and ACC reported a sequential jump of ~17% and
~14% in dispatches, respectively.
In November 2011, overall industry dispatches grew ~20% YoY due to a
low base on account of inventory built-up by dealers in October 2010.
However, dispatches in November 2011 declined ~2% on an MoM basis.
Cement prices down marginally by ~| 5/bag MoM in December
All-India average cement prices declined by ~| 5/bag in December 2011
and stood at ~| 262/bag. Prices in the northern, central and eastern
regions have seen a decline of | 5-10/ bag during the month while prices
in the southern and western regions have seen a stability in prices.
According to our discussion with dealers, cement prices are expected to
remain at the same levels or may increase in the coming months if
demand continues to remain strong.
Industry outlook
All-India cement demand is expected to grow ~5% in FY12E against 4.4%
in FY11 as consumption has been subdued during the year and grew by
~5% YoY in April-November 2011. For December 2011-March 2012, we
expect demand to grow ~4% YoY, lower than YTD growth rate, on
account of a higher base in March 2010. However, the slowdown in
construction activities would remain a key concern. The utilisation rate is
expected to decline further to 75% in FY12E and would remain at the
same level in FY13E on account of high additions in effective capacity as
against incremental demand. However, utilisation is expected to start
improving from FY14E onwards as incremental demand is likely to keep
pace with the additions in effective capacities.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
December dispatches grow ~12% MoM…
Cement majors report aggregate dispatch growth of ~12% YoY
Major cement players have reported an aggregate increase of ~12% YoY
in cement dispatches in December 2011 mainly because of a lower base
last year and a pick-up in demand during the month post monsoon. On an
MoM basis also, cement dispatches have increased ~12% due to a pickup
in construction activities across regions. Jaypee outperformed other
players with ~29% YoY growth in dispatches followed by Shree Cement
with ~17% YoY. Heidelberg and UltraTech reported YoY growth of ~13%
and ~10%, respectively, in dispatches while ACC reported ~9% YoY
growth. JK Lakshmi and Ambuja Cement reported growth of 2.5% YoY
and 5.5% YoY, respectively. On an MoM basis, aggregate dispatches
increased ~12%, due to a pick-up in demand post monsoon and festive
season. UltraTech and ACC reported a sequential jump of ~17% and
~14% in dispatches, respectively.
In November 2011, overall industry dispatches grew ~20% YoY due to a
low base on account of inventory built-up by dealers in October 2010.
However, dispatches in November 2011 declined ~2% on an MoM basis.
Cement prices down marginally by ~| 5/bag MoM in December
All-India average cement prices declined by ~| 5/bag in December 2011
and stood at ~| 262/bag. Prices in the northern, central and eastern
regions have seen a decline of | 5-10/ bag during the month while prices
in the southern and western regions have seen a stability in prices.
According to our discussion with dealers, cement prices are expected to
remain at the same levels or may increase in the coming months if
demand continues to remain strong.
Industry outlook
All-India cement demand is expected to grow ~5% in FY12E against 4.4%
in FY11 as consumption has been subdued during the year and grew by
~5% YoY in April-November 2011. For December 2011-March 2012, we
expect demand to grow ~4% YoY, lower than YTD growth rate, on
account of a higher base in March 2010. However, the slowdown in
construction activities would remain a key concern. The utilisation rate is
expected to decline further to 75% in FY12E and would remain at the
same level in FY13E on account of high additions in effective capacity as
against incremental demand. However, utilisation is expected to start
improving from FY14E onwards as incremental demand is likely to keep
pace with the additions in effective capacities.
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