Emkay Global Financial Services has come with its earning estimates of cement sector for June quarter. As per the research firm, cement companies Q1FY13 is expected to post revenue growth of +17% yoy as volumes grow 9.5% yoy while realizations are estimated to post growth of +7.3% yoy.
Emkay Global Financial Services Q1FY13 Result Preview for cement sector: Q1FY13 is expected to post revenue growth of +17% yoy as volumes grow 9.5% yoy while realizations are estimated to post growth of +7.3% yoy. Even though April volume growth took a hit due to sand mining ban implemented in various states across Northern and Southern region, the dip in volumes is controlled led by low base and delayed monsoons in June leading to better offtake. Also average realizations grew 7.3% yoy despite price decline in May (due to lower offtake on account of sand shortage obstructing construction activities) as prices sharply bounce back in June. On the cost front, railway freight hike (Hike of 23% in base freight by railways from 6th March, 2012) and higher fuel costs (even though international coal prices have softened, the effect is negated by sharp rupee depreciation) are expected to increase total cost/t by 9.8% yoy. However sequentially costs are estimated to increase by only 0.5% and with realizations growth of 5.2% qoq ( Rs4508/t, +7.3% yoy ) , we estimate 21.6% qoq growth in EBITDA/t to Rs1166/t (+0.7% yoy) In the current quarter we expect EBDITA to grow 12% yoy but decline 1.6% qoq due to lower volumes despite better qoq EBITDA/t growth this quarter. Consequently, we estimate APAT (for cement companies under our coverage) to grow by 12.3% yoy but decline 13.6% qoq. Maintain REDUCE ratings on Ambuja, Ultratech & India Cement. Prefer ACC & Shree Cement.| Company | Net Sales (Rs mn) | Growth | APAT (Rs mn) | Growth | ||||
| Q1FY13 | Q1FY12 | YoY | QoQ | Q1FY13 | Q1FY12 | YoY | QoQ | |
| ACC | 26970 | 24030 | 12% | -6% | 3646 | 3366 | 8% | -9% |
| Ambuja Cements | 25196 | 21733 | 16% | -4% | 4224 | 3475 | 22% | -17% |
| India Cements | 12057 | 10568 | 14% | 8% | 1049 | 1057 | -1% | 62% |
| Madras Cements | 9809 | 7642 | 28% | 8% | 1306 | 983 | 33% | 17% |
| Orient Paper | 6375 | 5339 | 19% | -24% | 636 | 584 | 9% | -26% |
| Ultratech Cement | 50143 | 43654 | 15% | -6% | 6487 | 6576 | -1% | -25% |
| Shree Cements | 13492 | 10340 | 30% | -13% | 997 | 555 | 80% | -9% |
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
