Cement Sector Check - Fuel Cost Raising Its Head: 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.Even as cement prices stand weak (since Q2 FY23 till date), the street found solace in the plunging global fuel costs, hoping it will stay low and drive-up Ebitda margins. However, the recent rebound in global fuel rates (petcoke up 23% and thermal coal up 16% from the bottom of mid-July-23) could challenge the hypothesis (our savings expectations have been reduced from Rs 350/tonne to Rs 270/tonne). Add to it the Q1 FY24 disappointment – of ~0.5-4% QoQ realisation drop and sequential rise in freight cost/tonne (reported by several cement companies) – and the saving expectations get further dimmed. With the following concerns appearing sticky –continued weak pricing power, anduncertainty owing to huge capacity build-up by Adani Cement. We stay cautious on the cement sector..Click on the attachment to read the full report:.Cement Q1 Results Review - Volumes Shall Continue To Drive FY23-25E Earnings Recovery: Dolat Capital.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.

Cement Sector Check - Fuel Cost Raising Its Head: ICICI Securities

Sector concerns appear sticky.

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