Cement Q3 Preview: Volume Growth, Higher Margins To Drive Earnings, Says Prabhudas Lilladher
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We expect Ebitda of our coverage universe to grow by 42% YoY, led by volume growth and margin expansion. Volumes are expected to grow 10.5% YoY in the quarter.
Ebitda/tonne is expected to expand by 28% YoY at Rs 980, led by better prices and lower costs. Street is doubtful on sector’s ability to increase prices post Competition Commission of India raids.
While, we remain confident that prices would see meaningful increase to help maintain Q3 FY21 margins given the peak period of activity and steep surge in fuel cost.
We reiterate our positive view on the sector in wake of strong demand outlook across the sectors and reasonable valuations.
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