The average per-bag price realisation of cement makers increased from a modest four per cent in the financial year 2003-04 to 13.26 per cent in first quarter ended in June 2004 and further to 15.62 per cent in the second quarter to September 2004.
As a result, PBIT margin, or operating profit margin, of the 14 cement companies zoomed to 16.23 per cent in the first half of this financial year from 9.52 per cent in the year-ago period.
The figure was up from 11.40 per cent in the quarter to June 2003 to 16.63 per cent in the quarter to June 2004. In the September 2004 quarter the margin more than doubled to 15.81 per cent from 7.42 per cent in the year-ago quarter.
Though the cement makers are on the profit making binge, shares in these firms have not reacted to the healthy bottom lines.
Almost all shares are hovering well below their all-time highs achieved in the past 10 years. These stocks are currently trading at a an average price-earnings multiple (PE) of 14.97 times their trailing 12-month net profit, which is lower than the 19.14 in the previous year.
Cement major ACC is currently having a PE of 16.56 against 24.05 an year ago. ACC
