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ICICI Securities Report
Heidelberg Cement India Ltd.'s Q2 FY23 Ebitda of Rs 476 million (down 59% YoY) was below our / consensus estimates owing to lower-than-expected volumes.
Volumes declined 19%/10% YoY/QoQ as company attempts to pass-on (23% YoY and 3% QoQ) cost increases via realisation growth of 8% YoY but down 5% QoQ.
Consequently, Ebitda/tonne declined 50%/44% YoY/QoQ to Rs 476/tonne (our estimate: Rs 587/tonne).
Central region, key market for Heidelberg Cement is likely to see 20% capacity addition (13-14 million tonne) over FY23-24 which may put pressure on the company's near-term volumes / profitability, in our view.
Factoring in lower volumes but also better than-expected fuel inventory management, we slightly raise our FY23E-FY24E Ebitda by 1-3%.
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