Cement Q1 Result Preview - Resilient Quarter; Profitability Intact Despite Cost Rise: ICICI Securities

Workers load sacks of cement onto a truck in India. (Photographer: Anindito Mukherjee/Bloomberg)

Cement Q1 Result Preview - Resilient Quarter; Profitability Intact Despite Cost Rise: ICICI Securities

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.

ICICI Securities Report

While year-on-year as well as quarter-on-quarter comparison in Q1 FY22E is not meaningful given the varying degree of lockdown/restrictions due to Covid, industry is expected to post ~45% year-on-year growth in volumes with almost stable Ebitda/te year-on-year on a reported basis.

On a quarter-on-quarter basis, volumes are expected to be down ~20% quarter-on-quarter vs usual ~10% quarter-on-quarter decline, while average Ebitda /te may rise 8-9% quarter-on-quarter despite cost escalations.

We expect average realisation to rise 5% quarter-on-quarter (Rs 230/te) and 2.6% year-on-year (Rs 130/te) and total cost/te to increase ~3% both quarter-on-quarter and year-on-year (Rs 120/te).

Consensus earnings are yet again likely to be upgraded given better-than-expected prices sustaining till date in seasonally weak monsoon necessitated by cost escalations.

Click on the attachment to read the full report:

ICICI Securities Cement Q1FY22 Result Preview.pdf

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