Cement Outlook 2022 - In Uncertainty Lies Opportunity: ICICI Securities
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ICICI Securities Report
Despite an underperformance in H2 CY21 owing to concerns on sharp cost escalations and muted demand recovery, most cement stocks outperformed for the full-year CY21.
We believe consensus FY22-23E Ebitda may be downgraded by less than 5% due to weak demand during Q4 CY21, but that seems adequately priced in.
News flow on demand / pricing is likely to improve from mid January 2022 as peak construction period sets in. Coupled with receding cost pressures and scope for margin expansion, risk-reward seems favorable, in our view.
Besides, dividend payout across companies may increase given strong balance sheet / cashflow generation.
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