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DRChoksey Research Report
The cement sector experienced healthy sales volume growth, propelled by government-supported infrastructure projects and housing segment expansion. However, compared to the previous quarter, demand faced challenges due to unseasonal rains, festive season impacts, labor shortages, and election-related factors.
In Q3 FY24, industry-wide sales volume increased YoY, ranging from 6.0% (UltraTech Cement Ltd.) to 15.6% (ACC Ltd.). All companies witnessed sequential growth, except Ramco Cements Ltd., which observed a 13% QoQ decline. The average realisation for companies under our coverage was Rs 5,509.
ACC leads the industry with higher-than-expected sales volume growth of 15.6% YoY and a notable 9.9% QoQ increase. The utilisation rate came in at 92.0%, with blended realisation reaching Rs 5,526.
Shree Cement Ltd. also witnessed robust growth, with sales volume reaching 8.9 million tonnes and a 8.8% YoY increase in blended realisation to Rs 5,510 per tonne, UltraTech Cement showed resilience, achieving a 6.0% YoY and 2.0% QoQ increase in sales volume, with blended realisation improving to Rs 6,127 per tonne.
Despite facing challenges, Ramco Cements achieved a solid 10% YoY growth in sales volume, although a 13% QoQ decline was attributed to adverse weather and festive season factors. Nonetheless, the company saw an increase in capacity utilisation to 74%, with blended realisation reaching Rs 5,265 per tonne.
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