Cement Sector Q4 Preview - Strong Volumes To Drive Earnings: Motilal Oswal
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Motilal Oswal Report
We estimate our coverage universe to post 24%/31%/52% YoY growth in revenue/Ebitda/profit after tax, led by strong volumes (73 million tonne, up 22% YoY) on a low base.
While pan-India average cement price in Q4 FY21 was flat QoQ, it is still up 3% YoY, led by price hikes across regions in March.
We estimate our coverage realization to rise by 2% YoY (flat QoQ) to Rs 4,950/tonne.
On a YoY basis, operating leverage benefit (from higher volumes), coupled with higher realization, should offset the rise in fuel costs resulting in 7% YoY increase in estimated Ebitda per ton to Rs 1,156/tonne.
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