ECONOMY

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

BQ Blue’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 BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

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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