Indian Cement Sector Q3 Earnings Preview – Steady Pricing To Aid Margins: Systematix

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Systematix Research Report

We estimate companies in our coverage universe to deliver revenue growth of 13% YoY in Q3 FY22E, driven mainly by 7.9% YoY growth in realisations and volume growth of 4.8% YoY.

We expect revenue/Ebitda growth of 23.2%/19.7% for our coverage universe on a QoQ basis. During the quarter, volume growth likely remained in mid-single-digits YoY, while net sales realisation grew by 8% YoY.

Early October 2021 witnessed several price hikes due to-

  1. a surge in petcoke and international thermal coal prices, which coincided with minimal domestic availability of thermal coal and

  2. high diesel prices.

Diesel prices were cut abruptly by about 10% in Nov-21, pausing the pace of cement price hikes and rollbacks in some places. Nonetheless, cost price inflation generally favours cement companies and leads to margin expansion.

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