Cement Q2 Results Preview – Cost Pressures Easing Out; Price Hikes Key In H2 FY23: ICICI Securities


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Cement companies under our coverage may see ~35% YoY decline in Ebitda during Q2 FY23E, higher than the past two quarters, owing to sharp cost increases.

Volumes may rise 8.2% YoY; however, Ebitda/tonne may plunge 40% YoY (Rs 462/tonne) to Rs 679/tonne (near-decadal low) as realisation rise of ~4% YoY (Rs 193/tonne) may fall short of ~16% YoY (Rs 676/tonne) cost increase.

On QoQ basis, realisation shall decline ~4% (~Rs 225/tonne) resulting in 30% QoQ fall in Ebitda/tonne. Further, robust demand recovery from mid-August 2022 (across regions) shall provide cement players the confidence to raise cement prices, in order to mitigate the sticky cost pressures.

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