Building Material Q2 Results Preview - Profitability Impacted On Higher Raw Material Cost: ICICI Securities

BQ Prime’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 BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.Building material companies under our coverage universe are expected to report tepid revenue growth in Q2 FY23E on high base YoY (pent-up demand YoY due to Q1 FY22 being impacted by the resurgence of pandemic). However, growth in H1 FY23 YoY is expected to be in double digits (baring pipe companies) with demand momentum remaining healthy. Profitability is expected to remain tepid in the quarter (Q2 FY23) on account of adverse impact of higher raw material prices and no meaningful price increases taken in the quarter. For Q2 FY23E, we estimate tile companies under our coverage to witness a flat YoY volume growth on high base (three-year compound annual growth rate of 7.9-8.4%) with operating margins declining sharply YoY (down 434 bps to down 371 bps) due to severe input price inflation. In plywood segment, we expect volume growth of 0.6-3% YoY (three-year CAGR: 1.8%-14.2%) with operating margins declining YoY on higher raw material cost inflation. For pipe companies, we estimate volume to decline by 3.0-17.8% (three-year CAGR: down 0.4% to up 6%) due to destocking by dealers as PVC resin prices declined continuously in the quarter. .Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Building Material Q2 Results Preview - Profitability Impacted On Higher Raw Material Cost: ICICI Securities

Building material companies under our coverage universe are expected to report tepid revenue growth in Q2 FY23E on high base YoY.

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