BQ Blue’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 BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Nirmal Bang Report
Q3 FY22 will see further correction in Ebitda/million tonne for the cement sector as companies were unable to pass on the elevated cost pressure through increased prices.
While there was an attempt to increase cement prices in October 2021, weak demand resulted in pressure on pricing in the subsequent months, leading to weak QoQ pricing for most companies.
Input costs like coal and petcoke were lower from record highs but they were still substantially higher on YoY basis. We are building in ~Rs 200 decline in Ebitda/million tonne for the sector in Q3 FY22 over Q2 FY22.
The decline will be driven by both lower realisations as well as higher input costs. Despite weak margins and aggregate Ebitda decline of ~16% YoY for the sector, we believe that earnings are likely to have bottomed out in Q3 FY22.
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