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Cement Monthly

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March 2011

January to March is generally a quarter of strong cement demand. However, the demand revival has not been to the extent of supporting a double-digit demand growth for the year 2011. The cement dispatches of the top four cement players witnessed a YoY growth of 10.8% in March v/s a robust 15.5% in February. The dispatch growth of top four cement majors in January stood at 6.3%.

The strict supply discipline maintained by the industry resulted in rise in cement prices by Rs.40-50 per 50 kg bag in the last 4-6 months. The YoY prices have risen by ~ 25-30% YoY, thus resulting in better and stronger Q4FY11E nos.

The strong Q4FY11 nos. is well factored in the prices of the cement stocks; however, demand revival remains a key challenge for the sector. We remain positive on the long-term prospects of the cement sector, however in near term we believe the sector will move sideways.

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Written by Fundamental Side

April 15, 2011 at 5:40 pm

Posted in Cement

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CEMENT BLOCK

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CEMENT MONTHLY –February 2011

 

 

 

 

 

 

 

Industry as a whole has performed better in the month of February v/s previous month. ACC, Jaiprakash Associate & Dalmia Cement dispatches grew by 17%, 36% & 20%  YoY respectively mainly on account of capacity expansion. However, most of the other cement companies reported a YoY sales growth of 3.5% to 5%.

The recent change in the tax structure from 10% excise duty to 10% ad valoreum duty as well as 30% hike in the coal prices by coal India negatively affected the sector. In response to this, cement companies hiked cement prices by Rs.6-10/ 50 kg bag across regions. In lieu of rising raw material cost, cement industry has already raised the prices by Rs. 25- 40 for a 50-kg-bag in the last two months. As the industry has learnt to maintain price discipline, we do not expect prices to soften for the coming few months. We expect a better cement demand in FY12E v/s the current year mainly due to increased infra spending by the GoI. We retain our POSITIVE stance on the sector. We have NEUTRAL rating for ACC , BUY on Heidelberg Cement & SELL on Shree Cement.

From the desk of AMI SHAH

Written by Fundamental Side

March 8, 2011 at 5:53 pm