Cement cos' Q1 earnings to disappoint market investors

 Moneycontrol Bureau

After enjoying a peak pricing power in March, cement companies are likely to face margin pressure in the April-June quarter, due to a combination of weak cement prices and sluggish demand because of the monsoons. Cement prices have already fallen to Rs 266/bag from Rs 276 in March and profits of leading companies like ACC, Ambuja and UltraTech could weaken further in the coming quarters if demand does not pick up, say analysts.

In addition, margins will also be impacted by higher interest and depreciation costs during Q1, said brokerages

"Lower demand from the infrastructure segment, slow pick-up in real estate activity and slow construction due to the onset of the monsoon led to the lower volume growth in the quarter," Jaspreet Singh Arora from Anand Rathi told moneycontrol.com.

The gloomy outlook on the sector