Cement Sector Update - Monsoon Setting In, Prices To Go Soft: IDBI Capital

The shadow of site workers falls on wet cement as it is poured over reinforced steel during groundwork construction. (Photographer: Angel Navarrete/Bloomberg).

Cement Sector Update - Monsoon Setting In, Prices To Go Soft: IDBI Capital

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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.

IDBI Capital Report

Our interaction with cement dealers across India suggest that an average cement price has increased by 1% month-on-month in June-2021 and thus Q1 FY22 average cement price is up 6% QoQ.

Cost has moved up too with imported coal is up 14% QoQ and freight index is up 4% QoQ in Q1 FY22.

On demand front, we are modeling in cement demand in Q1 FY22 to be lower by 25% versus Q4 FY21.

But despite lower volume, Ebitda/tonne is expected to improve on QoQ in Q1 FY22. This will be driven by higher realisation.

Historically realisation has been strong until monsoon and then it starts receding.

Click on the attachment to read the full report:

IDBI Capital Cement Sector Update.pdf

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