Challenges ease, cement companies may now go from strength to strength

Aided by volume growth, analysts see earnings improving in March quarter

Viveat Susan Pinto Mumbai

The March quarter (Q4) of the ongoing financial year (FY23) may see cement companies report better financial numbers as input costs ease, pricing action resumes, and cement demand remains firm. While companies have been cautiously optimistic about their outlook, analysts and sector experts remain bullish.
In its latest report on the cement sector, brokerage IDBI Capital said that it expected earnings before interest, tax, depreciation, and amortisation (Ebitda) per tonne for cement companies to improve by Rs 200-300 sequentially in Q4. This is likely to be aided by a 10 per cent year-on-year (YoY) volume growth in the March quarter, a 10 per cent sequential decline in fuel costs and a 1-4 per cent sequential price hike during the period, the brokerage house said.
On average, Ebitda per tonne for cement companies in Q3, according to experts, was Rs 760-780, a decline of Rs 120-130 from a year ago. Sequentially, there was an improvement of Rs 180

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First Published: Feb 26 2023 | 10:21 PM IST

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