Eyeing a strong recovery, the cement industry is expected to report volume growth of 5-6 per cent YoY in Q4FY25, stated a report by Nomura. This, it added, will be on the back of improved demand and channel stocking. “Within our coverage universe, we expect Ultratech and Ambuja to have recorded the highest volume growth, up 14 per cent YoY each, partially on account of inorganic acquisitions. According to our checks with cement dealers, trade prices improved by Rs 7/bag QoQ in Q4FY25 to Rs 344/bag, up 2 per cent sequentially, led by the East and North regions, up Rs 16/bag and Rs 13/bag QoQ, respectively,” the brokerage firm said.
On the cost front, savings from lower fixed-cost/t would be partially offset by increasing pet coke prices. However, Nomura maintained, the full impact of high pet coke should be evident from Q1FY26. “As a result, we estimate operating cost/t to have declined by 3 per cent YoY for the list of cement sector stocks under our coverage. We forecast Q4FY25 EBITDA/t to have improved by an average of Rs 200/t sequentially across our coverage universe. We expect Shree Cement to report the highest unitary EBITDA of around Rs 1,350/t, among our coverage,” it said.
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JM Financial said, “We estimate the average EBITDA/tn of cement companies under our coverage to see strong recovery in Q4FY25 owing to seasonal tailwinds in demand supported by ~2-2.5 per cent QoQ price rise and higher operating leverage. EBITDA/tn of our coverage companies is likely to rise by 29 per cent QoQ (+Rs 238/tn) but will still be lower by 2 per cent YoY.” Cement companies started announcing price hikes of Rs 10-50/bag across regions in the first week of Apr’25. With the recent uptick in input prices, likely revision of limestone royalty rates, implementation of mining tax in Tamil Nadu and continued weak operating performance in the South, JM Financial said, it is hopeful of partial price hike absorption in the market.
Volume growth as dealers push for year-end targets
In Q4FY25, the India cement industry recorded a recovery in demand — from both the trade and non-trade segments. “We believe channel stocking also helped the strong volume growth.
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