Cement volumes likely to grow 11% in Q4: MOST

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26 Aug, 2025 12:21

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Motilal Oswal has come out with its earnings estimates on cement sector for March quarter FY12. According to the research firm, cement demand continues to recover, with volumes likely to grow ~11% YoY (~15.5% QoQ) in 4QFY12. While volume growth in 4QFY12 would be on a low base of 4QFY11, there are initial signs of real pick-up in construction activity. We expect capacity utilization to increase from ~74% in 3QFY12 to ~84% in 4QFY12. This recovery comes after 9 quarters of YoY decline in utilization. We expect 10-12% volume growth in FY13, translating into capacity utilization of 77% in FY13 as against 74% in FY12.

The research firm expects cement prices to remain buoyant at least till 1QFY13, driven by seasonality in demand and pricing discipline. However, long term demand drivers continue to be present. We believe that valuations are partly reflecting near term strength in the cycle, limiting upside in the short term. However, the long term story is intact and any correction would provide a good entry point. We prefer UltraTech/Grasim in large caps, and Shree Cement and Birla Corp in mid caps.

(Rs in million)

Company	Sales			Net Profit
	Mar. 12	%YoY	%QoQ	Mar. 12	%YoY	%QoQ
ACC	29,742	24	18.8	4,317	23.1	123.1
Ambuja Cements	27,084	22.7	16.3	4,473	9.8	38.5
Birla Corporation	6,140	4.3	14.2	820	30.1	87.6
Grasim Industries	13,219	-7.3	6.8	2,777	-29.8	1.2
India Cements	11,066	10.9	17.5	1,116	55.5	98.2
Shree Cement	15,285	42.8	21.4	972	LP	64.2
Ultratech Cement	53,601	19.4	17.2	7,084	-2.5	24.4

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