Cement sector results preview for Q3FY12: Angel

Angel Broking has come with its December quarterly earning estimates for cement sector. The research firm expects, the cement sector's valuations in terms of EV/sales and EV/tonne when compared to utilization levels are almost 23% more expensive than historical valuations during periods of similar utilization levels.

Angel Broking's quarterly earning estiamtes on cement sector: Higher coal prices to exert margin pressures in this quarter Cement companies are expected to face margin pressures due to higher yoy power and fuel costs due to increased domestic and international coal prices and INR depreciation. During March 2011, Coal India hiked the price of coal supplied by it to non-core sectors by ~30%. Average prices of the New Castle Mckloksey 6,700kc coal were higher by 6.2% on a yoy basis. However, on a sequential basis, average coal prices in USD terms were down by 5.3%, but ~11% qoq depreciation in average INR/USD rates, negated the fall and average coal prices in INR terms were higher by 4.5% on a qoq basis.  3QFY2012 expectations