Cement Q1 Results Review – Robust Volume Growth With Cost Pressure Easing; Pricing Muted: Axis Securities

Axis Securities Report

The companies under our coverage reported volume / revenue / Ebitda / adjusted profit after tax growth of 19%/16%/10%/15% YoY against expectation of 13%/11%/17%/15%.

Ebitda margins contracted by 80 basis points YoY but improved by 50 bps QoQ. Ebitda/tonne for the quarter stood at Rs 858, down 7% YoY but up 2% sequentially.

Realisation/tonne declined by 2.8%/1% YoY/QoQ to Rs 5,559. Cost/tonne was stood at Rs 4,701, down 1%/2% YoY/QoQ.

Company-wise, the performance of ACC Ltd., Ambuja Cement Ltd., UltraTech Cement Ltd., Shree Cement Ltd., and JK Cement Ltd. were in line with or above expectations.

Orient Cement Ltd., Star Cement Ltd. and Heidelberg Cement India Ltd. posted satisfactory numbers. On the other hand, Dalmia Bharat Ltd., JK Lakshmi Ltd., and Birla Corporation Ltd delivered underperformance.

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