Cement’s Volume Recovery Continues, Margins Stay Strong, Says Motilal Oswal
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Motilal Oswal Report
We estimate our coverage universe to report a 11%/ 42%/ 80% YoY growth in Revenue/ Ebitda/ profit after tax due to higher cement prices and strong volumes (up 7% YoY, up 15% QoQ).
While realization is expected to grow 4.5% YoY (down 1% QoQ) to Rs 4,974/tonne, Ebitda per ton is estimated to rise 33% YoY to Rs 1,225/tonne (down 1% QoQ) supported by 2% YoY fall in cost to Rs 3,750/tonne.
Cement industry volumes have continued to recover, led by rural housing and a pickup in government spending (particularly in East and North).
Pan India average cement price has been up 7% YoY (flat QoQ) in Q3 FY21, despite softening prices across regions in Dec-20.
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