Cement Q2 Results Preview – Margins To Remain Under Pressure: Systematix


BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Systematix Research Report

Cement companies under our coverage are likely to face margin pressure due to-

  1. subdued demand,

  2. limited price hikes, and

  3. high energy costs (up 28% YoY/ up 2% QoQ).

There is, however, a marginal respite in logistics costs. Sales volume in cement are likely to be higher by 9.6% YoY (on a low base effect) and lower by 6.4% QoQ due to seasonality.

Channel checks indicate that volumes were affected by-

  1. heavy rains,

  2. sluggish demand ahead of festive season,

  3. labour issues in some states,

  4. sand mining issues, and

  5. a general slowdown in new projects.

For Q2 FY23E, we estimate revenue growth of 12.6% YoY/down 10% QoQ, driven by up 9.6% YoY/down 6.4% QoQ increase in volume and up 2.8% YoY/ down 3.8% QoQ in realisation (net sales realisation) for stocks within our coverage.

Ebitda/tonne during Q2 could remain weak and lower by 41.4% YoY due to high fuel costs, in line with Q4 FY22 and Q1 FY23 trends. Sustained higher power and fuel costs (petcoke, international coal and domestic e-auction coal) are unlikely to provide relief, in our view.

Click on the attachment to read the full report:


This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.


Source link

What is your reaction?

In Love
Not Sure

You may also like

Comments are closed.

More in:Business