Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
Research

| More

Cement - 1QFY17 Results Review - Robust performance continues on cost benefits - Reliance Securities

Posted On: 2016-08-22 20:57:10

Sector Review

Cement industry's 1QFY17 performance was strong and exceeded our estimates on operating front mainly on account of better-than-expected reduction in operating costs mainly led by sharp fall in Power & Fuel costs (down by 23% yoy & 7% qoq on per tonne basis). Though demand environment softened on sequentially, it grew moderately on yoy basis, as the companies under our coverage universe recorded an average sales volume growth of ~6% yoy. Operating cost/tonne dipped by ~7% yoy mainly aided by ~23% fall in Power & Fuel costs/tonne. An increased usage of petcoke by many companies along with low-cost petcoke inventory led to sharp decline in fuel costs. However, dismal realization - barring Northern and UP markets - was a setback for most of the companies, which arrested margin expansion. Average realizations remained broadly flat on yoy basis, whereas it surged by ~4% qoq mainly aided by strong realization recovery in Northern markets. Companies operating in Northern markets i.e. Shree Cement & JK Lakshmi Cement recorded better sales growth. Ramco Cements, Mangalam Cement, ACC and UltraTech saw maximum savings in operating cost/tonne in the range of ~8-17% yoy owing to increased usage of petcoke and improving operating synergies. UltraTech, Shree Cement & Ramco Cements recorded a better-than-average EBITDA/tonne at Rs1,039, Rs1,262 & Rs1,265, respectively owing to their cost leadership. Given the favourable pricing environment and price recovery in the Southern markets, we expect the companies' performance to remain healthy in ensuing quarter. However, visible hardening of fuel costs might arrest margins expansion.

Outlook & Valuation

Though demand growth improved by strong ~9-10% in 4QFY16, it softened in 1QFY17 mainly on account of moderation in non-trade sales and absence of rural demand. However, demand was moderately higher than last year and is expected to grow by ~5-6% yoy in FY17E mainly to be supported by improvement in rural consumption due to favourable monsoon and continued traction in Roads & Highway and other key infra segments. Moreover, we continue to believe that the demand from Project Segment will bounce back post monsoon in FY17E with pick-up in construction activities especially from projects pertaining to concrete road, urban infrastructure and irrigation. We foresee an uptick in demand scenario on the backdrop of expected pick-up in construction activities especially from projects awarded in last 12-18 months. However, delay in demand recovery in Southern region will pose a challenge to the industry. Notably, slower capacity addition and incremental demand from proposed "Smart Cities" project & "Housing for All" scheme are likely to aid utilizations of the industry and hence profitability in the long-term. We firmly believe that cement industry is a perfect play of infrastructure boost in India owing to better balance-sheet of cement companies and improving return ratios. At the CMPs, we maintain our positive stance on UltraTech Cement in Large-cap space, while in Mid-cap space we prefer J.K. Cement, Ramco Cements Cement & Mangalam Cement.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Result Update: Time Technoplast Ltd - ACCUMULATE - TP Rs.210 - Kotak
Result Update: PNC Infratech Ltd - ACCUMULATE - TP Rs.154 - Kotak
Result Update: Praj Industries Ltd - REDUCE - TP Rs.73 - Kotak
Result Update: Blue Star Ltd - ACCUMULATE - TP Rs.741 - Kotak
Result Update: AIA Engineering Ltd - SELL - TP Rs.1130 - Kotak
Result Update: KNR Constructions Ltd - ACCUMULATE - TP Rs.236 - Kotak
Result Update: Finolex Industries Ltd - BUY - TP Rs.712 - Kotak
HSIL Q1 FY18 Result Update Rating - HOLD - Arihant Capital Markets
CEO & MD of Infosys Resigns: Angel Broking
Indoco Remedies: 1QFY2018 Result Update - Angel Broking
Aurobindo Pharma: 1QFY2018 Result Update - Angel Broking
Insurance: Widening the base - Kotak
Banks : NIM-short term tailwinds and cyclical headwinds : Deciphering the cause of recent compression of NIM - Kotak
Jagran Prakashan Q1 FY18 Result Update Rating - HOLD - Arihant capital Markets
NCLT admits RCOM merger petition with Aircel: Angel Broking
Views on Sun Pharmaceutical Industries Limited 1QFY2018 Results: Angel Broking
Economy: RBI surplus transfer: real danger of fiscal slippage - Kotak
Views on Cadila Healthcare Ltd 1QFY2018 Results: Angel Broking
Views on Cipla Ltd 1QFY2018 Results: Angel Broking
The Pitch Report - Result Update: Balmer Lawrie Company - BUY - TP Rs.289 - Kotak
The Pitch Report - BBTC - BUY - TP Rs1130 - Kotak
Result Update: NMDC - REDUCE - TP Rs.130 - Kotak
Result Update: Mahanagar Gas Ltd - SELL - TP Rs.1006 - Kotak
Result Update: Tata Motors - BUY - TP Rs.514 - Kotak
Result Update: Gabriel India Ltd - BUY - TP Rs.190 - Kotak
Initiating Coverage: Radico Khaitan Ltd - BUY - TP Rs.200 - Kotak
Views on Indoco Remedies Ltd 1QFY2018 Results: Angel Broking
Bajaj Auto announces a tie-up with Triumph of UK: Angel Broking
Technology 1QFY18 review: Tactical margin levers exercised well - Kotak
Cement - August 4, 2017 - Kotak
Result Update: JSW Steel Ltd - REDUCE - TP Rs.230 - Kotak
Result Update: Carborundum Universal Ltd - SELL - TP Rs.324 - Kotak
Result Update: Container Corporation of India Ltd - REDUCE - TP Rs.1210 - Kotak
HCL Technologies (HCL IN) - Healthy operational performance - CSEC Research
L&T (LT IN) - Strong PAT growth aided by execution in Infra segment - CSEC Research
GlaxoSmithKline Pharmaceuticals - 1QFY2018 Result Update - Angel Broking
Dr. Reddy's Laboratories - 1QFY2018 Result Update - Angel Broking
Views on Lupin Ltd 1QFY2018 Results: Angel Broking
Tech Mahindra - 1QFY2018 Result Update - Angel Broking
Federal Bank - 1QFY2018 Result Update - Angel Broking
Margin expansion on the cards for SBI: Angel Broking
Views on Tech Mahindra Ltd 1QFY2018 Results: Angel Broking
Views on United Phosphorus Ltd 1QFY2018 Results: Angel Broking
Result Update: Blue Dart Express (BDE) - BUY - TP Rs.5150
Result Update: Escorts Ltd - ACCUMULATE - TP Rs.710 - Kotak
Result Update: The India Cements Ltd - BUY - TP Rs.234 - Kotak
Result Update: Larsen & Toubro Ltd - ACCUMULATE - TP Rs.1274 - Kotak
Result Update: NIIT Ltd - ACCUMULATE - TP Rs.110 - Kotak
Maruti Suzuki - 1QFY2018 Result Update - Angel Broking
Federal Bank Q1 FY18 Result Update Rating - HOLD - Arihant Capital Markets


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2017