Cement, 3QFY15E Results Preview :: HDFC Securities

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Cement : Another forgettable quarter
 Volumes fail to enthuse. Cement demand remained tepid despite all
enabling conditions, driven mainly by tight squeeze and liquidity and
paucity of government orders in the system. Our coverage universe is
likely to report a tepid 3.3% YoY growth in 3QFY15. South focussed
companies remain constrained for utilisations (55-60%). Only Shree
Cement (capacity ramp-up) and UltraTech (JPA Gujarat acquistion)
are likely to report strong volume growth.
 Pricing weak in all markets. Weak pricing across the country will
driven sequential declines in 3QFY15 (-1.8%). South focussed
companies will likely report marginal improvements due to sharp
upticksin pricing in December
 YoY EBITDA/t improvement is likely only for South focussed
companies. ACC may report a very weak quarter as limestone mining
operations at its Orissa and Jharkhand units were suspended for a
large part of the quarter. Sanghi Industries will likely report numbers
sequentially as operations at its plants were suspended for 38 days in
Sep quarter.
 We remain conservative on large cap stocks where valuations still do
not factor in a weak macro demand environment. We believe cement
stock valuations are even further ahead of our optimistic demand
assumptions in FY16-17. As a result, some of the numbers may
surprise investors on the downside.

LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010604