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http://www.icicidirect.com/mailimages/ICICIdirect_ConsolidatedResultPreview_Q4FY12E.pdf
Cement
ƒ Cement volumes grow ~9% YoY in Q4FY12
All-India cement consumption growth is expected at ~9% YoY in
Q4FY12 on account of better dispatches during January-February 2012
at ~11% YoY. Volume growth for our coverage universe is also
expected at ~9% YoY, led by significant rise in volumes of players like
Mangalam Cement (~43% YoY), Shree Cement (~21% YoY) Orient
Paper (~12% YoY). Others like ACC, Ambuja, UltraTech and India
Cement are expected to report volume growth of 7-9% YoY. On a
sequential basis, total volume growth is expected at ~15% due to lower
base of Q3FY12 due to monsoons. For the full year FY12E, demand
growth is expected at ~7% YoY as against ~4% in FY11.
ƒ Cement prices increase ~| 8/bag QoQ during Q4FY12
During the quarter, all-India average cement prices increased by ~|
8/bag QoQ to | 280/bag, mainly led by western and eastern regions
where prices increased by ~| 15-20/bag. However, prices in the
northern, central and southern region remained almost flat (up
marginally by ~| 1-2/bag QoQ). Average realisation of our coverage is
expected at | 4315/tonne (~12% YoY and ~3% QoQ).
ƒ Input costs on an uptrend
Cost pressure has increased due to increase in power & fuel cost and
freight cost. Shortage of domestic linkage coal led to shift towards
purchase from e-auctions & imports, which remain expensive compared
to domestic linkage coal. However, imported coal prices declined ~15%
during the quarter along with cut in custom duty. Also, the ~20%
increase in railway freight rates would impact cement companies by |
60/tonne. However, full impact will be seen in the next quarter.
ƒ Operating margin of cement universe to increase ~330 bps QoQ
Aggregate revenues of our cement universe are expected to increase
~21% YoY (~19% QoQ) on account of volume growth of ~9% YoY
(~15% QoQ) and 11% YoY increase in realisations (~3% QoQ). Average
EBITDA margin of our coverage universe is expected to increase ~330
bps QoQ to ~23% in Q4FY12E due to higher realisations. However, on a
YoY basis, the margin is expected to remain flat as the increase in costs
negated the impact of rise in realisations. PAT of our coverage universe
is expected to increase ~5% YoY and ~16% QoQ.
: Company specific view
Company Remarks
ACC The cement sales volume is expected to increase ~8% YoY (~14% QoQ) to 6.72
MT in Q1CY12. We expect net realisation to increase ~15% YoY and ~4% QoQ (|
160/tonne) to | 4411/tonne. EBITDA is expected to increase ~8% YoY (~45%
QoQ) to | 960/tonne
Ambuja Cement Cement sales volume is expected to increase ~8% YoY (~16% QoQ) to 6.1 MT in
Q1CY12. We expect cement realisation to increase ~17% YoY and ~3% QoQ (|
150/tonne QoQ) to | 4570/tonne. The EBITDA is expected to increase ~6% YoY
and ~43% QoQ to | 1140/tonne
UltraTech
Cement
The blended sales volume is expected to increase ~5% YoY (~12% QoQ) in
Q3FY12 at 11.37 MT. Blended realisation is expected to increase ~8% YoY to |
4573/tonne (increase ~| 160/tonne QoQ). Blended EBITDA is expected to increase
~4% YoY (~7% QoQ) to | 997/tonne
Shree Cement We expect cement sales volumes to increase ~21% YoY (~19% QoQ) to 3.48 MT
in Q4FY12. Cement realisations are expected to increase ~13% YoY (flat QoQ) to |
3723/tonne. We expect merchant power sales volume of ~300 million units at
realisation of | 4.2/unit. Cement EBITDA is expected to increase significantly by
~35% YoY (~5% QoQ) to | 1142/tonne
India Cement Sales volume is expected to increase ~9% YoY (~27% QoQ) to 2.77 MT in
Q4FY12. Cement realisation is expected to increase ~11% YoY (almost flat on
QoQ) to | 4347/tonne as prices remained almost flat during the quarter in the
southern region. We expect EBITDA to increase ~29% YoY to | 904/tonne
JK Cement Blended sales volume (grey & white) is expected to increase ~4% YoY (~30%
QoQ) to 1.71 MT in Q4FY12. The blended realisation is expected to increase ~15%
YoY to | 4673/tonne. Blended EBITDA is expected to increase ~49% YoY and
~16% QoQ to | 1043/tonne
JK Lakshmi
Cement
Cement sales volume is expected to increase ~7% YoY (~10% QoQ) to 1.34 MT in
Q4FY12. The realisation is expected to increase ~10% YoY to | 3638/tonne.
EBITDA is expected to increase ~47% YoY (~15% QoQ) to | 875/tonne
Heidelberg
Cement
We expect the sales volume to increase ~11% QoQ (up marginally~1% YoY) to
0.75 MT in Q4CY11. We expect realisations to increase ~8% YoY (~4% QoQ) to |
3562/tonne. EBITDA is expected to improve significantly on a sequential basis to |
502/tonne in Q1CY12 against | 40/tonne in Q4CY11
Orient Paper Cement sales volume is expected to increase ~12% YoY (~16% QoQ) to 1.11 MT.
Cement realisation is expected to increase ~10% YoY (~3% QoQ) to | 3714/tonne.
Cement EBIT is expected to increase ~8% QoQ to | 944/tonne. In the electrical
division, we expect EBIT margin at 3.2% against ~12% in Q4FY11 while in the
paper segment, we expect loss of | 11 crore at the EBIT level
Birla Corp Cement sales volume is expected to increase ~5% YoY (~18% QoQ to 1.64 MT in
Q4FY12. The cement realisation is expected to increase ~11% YoY (~4% QoQ) to
| 3654/tonne. Cement EBIT is expected to increase ~3% QoQ (~34% YoY) to |
573/tonne
Mangalam
Cement
Sales volume is expected to increase ~43% YoY (~15% QoQ) to 0.59 MT in
Q4FY12. We expect cement realisation to increase ~5% YoY (~2% QoQ) to |
3449/tonne. The EBITDA is expected to increase sharply by ~40% YoY (~4% QoQ)
to | 813/tonne
Source: Company, ICICIdirect.com Research
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