Cement Q2 Results Preview - Margin Intact As Eased Fuel Cost Offsets Seasonal NSR Weakness: Yes 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. .Yes Securities Report.Q2 FY24E has always been an operationally muted quarter for the cement industry, where prices often get moderated which drags the margin. However, the demand remained resilient aided by the infra and real estate segment, as a result we believe the industry to see a double-digit volume growth in Q2 FY24E. During July-September 2023, cement prices moderated QoQ due to seasonal weakness coupled with higher dispatches to sustain sequential volume growth. Consequently, we believe industry’s net sales realisation to moderate by 2-3% on both YoY and QoQ. However, revenue is expected to grow by 12% YoY, primarily driven by strong volume growth in Q2 FY24E. Given the steady correction in energy cost, the three-month trailing blended fuel cost corrected to Rs 1.5 per kilo calorie/kg vis-a-vis ~Rs 2.16 per kcal/kg in Q1 FY24. Hence, we believe this cost moderation savings will start reflecting from Q3 FY24 onwards. While the industry power and fuel cost can see another correction of Rs 100-150/tonne in Q2 FY24E versus Q1 FY24, translating the industry Ebitda to flat/marginal decline sequentially to +Rs 850/tonne..We are cautiously positive taking the cognisance of rising fuel cost, which we believe can be mitigated through a healthy pricing environment in subsequent quarters. Our top picks UltraTech Cement Ltd., Dalmia Bharat Ltd., Sagar Cements Ltd., and Orient Cement Ltd..Click on the attachment to read the full report: .Motilal Oswal - A Beneficiary Of Capital Market Momentum: ICICI Securities.DISCLAIMER This 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."

Cement Q2 Results Preview - Margin Intact As Eased Fuel Cost Offsets Seasonal NSR Weakness: Yes Securities

We are cautiously positive taking the cognisance of rising fuel cost, which can be mitigated through a healthy pricing environment

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Cement Q2 Results Preview - Margin Intact As Eased Fuel Cost Offsets Seasonal NSR Weakness: Yes Securities

We are cautiously positive taking the cognisance of rising fuel cost, which can be mitigated through a healthy pricing environment

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