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Motilal Oswal Report
Imported (South African and Australian) coal price has dipped sharply with an average quarter-to-date price decline of 28-33% in Q4 FY23. Imported petcoke price has remained range-bound at $165-185/tonne over the past few months.
We expect average energy cost to reduce by Rs 80-90/tonne in Q4 FY23 and Rs 200/tonne in Q1 FY24.
Cement players have attempted price hikes in Feb-March 2023; however, a significant portion of the hikes was reversed by offering discounts, incentives and price cuts.
We believe that North, West and Central India have witnessed an average price increase of 1-3% QoQ in Q4 FY23; though, prices in East and South regions have declined 2%/5% QoQ.
In Q4, the all-India average cement price appears to be flat to marginally negative versus Q3 FY23.
Cement demand momentum is largely intact with higher growth visible in nontrade segment (infrastructure development, real-estate and private capex) while individual-house-builder and retail demand remain modest.
We estimate 4-5% YoY demand improvement in Q4 FY23, even on a high base of the past two years.
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