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http://content.icicidirect.com/mailimages/ICICIdirect_CementMonthly_April2012.pdf
FY12E likely to end at 7.5% YoY growth in demand…
Major cement players reported an aggregate growth of ~14% YoY (~9%
MoM) in cement dispatches in March 2012 mainly on account of a pick-up
in demand from rural and semi urban housing and other construction
activities. Major demand pick-up was seen in the northern, central and
western regions. Among major players, Jaypee outperformed other
players with ~33% YoY growth in dispatches followed by Shree Cement
and JK Lakshmi with ~25% and 28%, YoY growth, respectively. Ambuja
reported ~12% YoY growth in dispatches while UltraTech and ACC
reported ~6% and ~7% YoY growth, respectively. Among smaller
players, Mangalam Cement outperformed with ~46% YoY growth while
another player JK Cement reported growth in the range of 9% YoY.
In February 2011, overall industry dispatches grew ~11% YoY due to a
low base and marginal recovery at the start of peak construction period.
However, dispatches in January 2012 increased ~0.1% on an MoM basis.
Cement prices up by ~| 15/bag MoM in March 2012
All-India average cement prices have increased by ~| 15/bag in March
2012 and stood at ~| 295/bag. Prices in the eastern region saw a sharp
increase in cement prices to the extent of | 50/bag while northern, central
and western regions witnessed an increase of | 10/ bag during the month.
According to our discussion with dealers, cement prices are expected to
remain firm or increase in the coming months on account of passing on of
costs hikes to end users.
Industry outlook
With expectations of ~10% YoY (~12% MoM) growth in March 2012, we
expect all-India cement consumption growth at 7.5% in FY12E against
4.4% in FY11 and 10.2% in FY10. Cement dispatches have grown ~7%
during April 2011-February 2012 mainly led by ~15% YoY growth during
the November-December-January period. Cement demand picked up
during the period mainly on account of a low base and increase in offtake
from construction activities post monsoon. However, demand has been
subdued during April-October 2011 and grew by just 3.5% YoY as
consumption from the housing and infrastructure segments remained
sluggish. The capacity utilisation rate is expected to remain at 77% in
FY12E (77% in FY11) from 87% in FY10. This was on account of ~ 19 MT
additions in effective capacity as against incremental demand of ~14 MT
during the period.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_CementMonthly_April2012.pdf
FY12E likely to end at 7.5% YoY growth in demand…
Major cement players reported an aggregate growth of ~14% YoY (~9%
MoM) in cement dispatches in March 2012 mainly on account of a pick-up
in demand from rural and semi urban housing and other construction
activities. Major demand pick-up was seen in the northern, central and
western regions. Among major players, Jaypee outperformed other
players with ~33% YoY growth in dispatches followed by Shree Cement
and JK Lakshmi with ~25% and 28%, YoY growth, respectively. Ambuja
reported ~12% YoY growth in dispatches while UltraTech and ACC
reported ~6% and ~7% YoY growth, respectively. Among smaller
players, Mangalam Cement outperformed with ~46% YoY growth while
another player JK Cement reported growth in the range of 9% YoY.
In February 2011, overall industry dispatches grew ~11% YoY due to a
low base and marginal recovery at the start of peak construction period.
However, dispatches in January 2012 increased ~0.1% on an MoM basis.
Cement prices up by ~| 15/bag MoM in March 2012
All-India average cement prices have increased by ~| 15/bag in March
2012 and stood at ~| 295/bag. Prices in the eastern region saw a sharp
increase in cement prices to the extent of | 50/bag while northern, central
and western regions witnessed an increase of | 10/ bag during the month.
According to our discussion with dealers, cement prices are expected to
remain firm or increase in the coming months on account of passing on of
costs hikes to end users.
Industry outlook
With expectations of ~10% YoY (~12% MoM) growth in March 2012, we
expect all-India cement consumption growth at 7.5% in FY12E against
4.4% in FY11 and 10.2% in FY10. Cement dispatches have grown ~7%
during April 2011-February 2012 mainly led by ~15% YoY growth during
the November-December-January period. Cement demand picked up
during the period mainly on account of a low base and increase in offtake
from construction activities post monsoon. However, demand has been
subdued during April-October 2011 and grew by just 3.5% YoY as
consumption from the housing and infrastructure segments remained
sluggish. The capacity utilisation rate is expected to remain at 77% in
FY12E (77% in FY11) from 87% in FY10. This was on account of ~ 19 MT
additions in effective capacity as against incremental demand of ~14 MT
during the period.
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