Cement Q3 Results Preview - Better Realisation Is A Key Growth Driver Amid Weaker Volume Trends: Systematix

Systematix Reports

We forecast a 9.0% YoY revenue growth for the companies under our coverage universe led by 9.0% YoY increase in volume and a realisation growth of 2.1% sequentially.

This quarter was signified by low albeit steady volume growth, further easing in power and fuel costs as well as improving realisations, mainly in the Eastern and Central regions.

Companies are making strides in cost optimisation measures with emphasis on fuel and logistical efficiencies coupled with advanced technology in the plants.

Overall, Ebitda/tonne is likely to improve by 35.1% for our coverage universe to Rs 1,137. We factor in volume/revenue/Ebitda/profit after tax growth of 9%/9%/47%/75% for Q3 FY24.

We continue to see unlocking in the face of strong industry tailwinds despite rich valuations.

Our preferred picks remain Ultratech Cement Ltd. and JK Cement Ltd. in the sector.

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