Economy & Market
Cement industry to witness strong performance: MSFL
Cement industry is set to witness another quarter of strong performance, says
Marwadi Shares & Finance (MSFL)
. Delayed monsoon in most parts of the country has enabled decent demand across regions. Cement prices witnessed lesser than anticipated correction post CCI verdict and were stable during Q1.
On the cost side, though players witnessed y-o-y higher costs, sequentially they were flat. International coal prices have softened during Q1, however, impact was nullified by higher rupee depreciation. Overall it expects industry to post a 12-15 per cent top line growth on a low base and a moderate earnings growth for Q1. Cement stocks continued to trade ahead of their valuations and outperformed the indices.
Industry recorded 7 per cent growth for FY12. MSFL expects it to post strong 11 per cent demand growth for Q1, partially on account of delayed monsoon in most parts of the country, which have enabled a double digit growth for Q1. MSFL coverage also is expected to report 11 per cent volumes growth.
However sequentially, Q1 volume would register a decline of four to five per cent. MSFL predicts demand to be soft in next couple of quarters on account of monsoon.