Cement Q4 Results Preview - Weak Pricing Dampens Industry Margin: HDFC Securities

HDFC Securities Institutional Equities

We expect industry volume to grow by 10% YoY in FY24. Input cost reduction should almost bottom out in Q4 FY24, in our view. Owing to fuel cost cool-off and higher green power share, we estimate our coverage universe margin will recover by Rs 170 per metric tonne YoY in FY24.

Further owing to the higher fuel cost base in H1 FY24, rising green power share and price hike taken by companies in April 2024, we estimate a margin recovery of Rs 100 per mt in FY25.

We expect a similar Rs 100 per mt margin recovery in FY26 too, aided by better pricing and lower cost.

We have maintained our FY24/25/26E industry volume estimates. But we cut Ebitda estimates by 5/2% for FY24/25E respectively, owing to price cuts taken by companies in Q4 FY24 to push volumes.

We maintain our FY26E estimates.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit 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 NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.