Deccan Cements - Valuation Re-Rating A Probability: Anand Rathi
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Anand Rathi Report
Good demand continued in Deccan Cements Ltd.'s key operating regions (Andhra Pradesh/Tamil Nadu/Telangana), leading to cement volumes growing 53% YoY to 0.53 million tonnes.
Realisations grew 12.8% YoY (though QoQ, down 2.7%).
Prices were hiked in June 2021; however, their sustainability will be a concern because of the commencement of the monsoon.
FY21 volumes grew 20.8% YoY to 1.78 million tonnes, the most, with capacity utilisation reaching 79%.
We expect cement volumes and revenue to clock 7% compound annual growth rates over FY21-23.
Risks: Demand slowdown; rise in input costs.
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