Heidelberg Cement Q4 Review - Result Below Expectations; Maintain Hold: Axis Securities

Axis Securities Report

Heidelberg Cement India Ltd. reported volume growth of 4% YoY which was lower than the industry average during the quarter. However, for FY24, the company reported volume growth of 9%. The current demand is impacted owing to election related disruption and labour shortage. However, it is expected to improve post the conclusion of general election. We therefore revise our volume growth guidance from earlier 8% to 6%. We expect the company to grow its volume at a CAGR of 8% over FY23-FY26E.

The current cement prices are down by Rs 6/bag compared to Q4 FY24 average cement prices. We expect them to remain subdued as Monsoon season is approaching which is traditionally a soft period for cement prices. We therefore pencil in lower cement prices for FY25.

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