Industry updates on cement, sugar, pipe, hospitals: CARE

CARE Research has come out with industry updates for August 2012. Cement, Sugar, Pipe, Hospital, Chlor Alkali, Roads and Highways are the industries. The research firm estimates stable industry growth (for Indian Hospital Industry) prospects on improving industry financials and rising demand for better health services, despite relatively weak economy.

1. Cement Industry- delayed monsoon kept the cement demand buoyed in Q1 FY13

• Cement despatch posted an impressive double digit growth of 10.6% on YoY basis in Q1 FY13. This was on account of the of the extended construction season owing to the delayed monsoon.
• During Q1 FY13, the average cement prices across all regions remained elevated. The quarterly average cement price increased by Rs.25 per bag on a QoQ basis and reached a level of Rs.334 per bag.

2. Indian Sugar Industry - with end of crushing season, sugar production in the month of May 2012 declined to 0.39 million tonnes

• Total sugar production during the period October 2011-May 2012, stood at 25.56 million tonnes, registering an increase of 7.9% on a y-o-y basis.
• The wholesale sugar prices in Mumbai, Kolkata and Delhi market registered an increase by 7%, 12% and 10% on a y-o-y basis, respectively.
• For the month of August 2012, government has released an additional 4 lakh tonnes of non-levy sugar to be sold in the market. Government has released 1.83 lakh tonnes of levy sugar quota for the same month, an increase of 5.2% on a m-o-m basis.

3. Indian Pipe Industry

• Net sales of key pipe manufacturing companies analysed by CARE Research increased by 18.8% y-o-y in Q1FY13, despite fall in sales volume
• The companies analysed witnessed a decline in PBDIT margin by 762 bps y-o-y to 7.5% in Q1FY13 due to higher raw material and other expenses
• Profit after Tax too decreased significantly by 71.4% y-o-y in Q1FY13 lead by higher interest and depreciation costs

4. Indian Hospital Industry

• EBITDA margins of major hospital players analysed by CARE Research increased marginally in Q1FY13 (yoy) on improved ARPOB coupled with higher occupancy rate.
• ARPOB continued to improve due to higher prices & marginal decline in ALOS.
• CARE Research estimates stable industry growth prospects on improving industry financials and rising demand for better health services, despite relatively weak economy.

5. Roads and Highways Industry- NHAI awarded mere 99 km of road length in Q1 FY13

• In FY 12, NHAI awarded projects with the total road length of about 6,491 km. For FY13, NHAI has set a target of awarding road projects with the length of about 9,500 km.
• Out of the total road projects under NHDP, projects covering the length of more than 18,000 km are yet to be awarded.
• NHAI is planning to ease the exit policy by allowing the road developers to exit the road project immediately after the completion of construction.

6. Indian Chlor Alkali Industry - caustic soda & soda ash output registered an increase on a y-o-y basis in June 2012

In the month of June 2012, production of caustic soda grew by 2.2% on a y-o-y basis while soda ash production increased by 1.8%.
? Average prices of both caustic soda lye and flake registered an increase in the month of June 2012. Also, soda ash prices grew by 9% on a yoy basis in the same month.

In the first quarter of FY 13, net sales of Tata Chemicals declined by 4.4% on a y-o-y basis and net profit contracted by about 38.5%. Profit was impacted due to production stoppage at Hilda plant and foreign exchange loss of about Rs. 100 crore.

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