 "A labourer loads cement bags onto an improvised motorized rickshaw at the construction site of a residential complex on the outskirts of Kolkata")
Shares of mid and small cap cement companies are in focus with India Cements, Prism Cement and HeidelbergCement India trading higher by more than 3% each on the BSE in otherwise subdued market.
Besides these three, Mangalam Cement, Sanghi Industries and Saurashtra Cement are quoting at their respective 52-week highs on the bourses.
NCL Industries, KCP, JK Lakshmi Cement, Kakatiya Cement, Panyam Cement, Shree Digvijay Cement, Gujarat Sidhee Cement, OCL India and Dalmia Bharat up 1%-4% on the BSE, as compared to 0.12% decline in the S&P BSE Sensex at 12:48 pm.
Total 36 cement companies including large cap, so far declared their June quarter results, have posted a strong 84% year on year growth in their aggregate net profit at Rs 2,823 crore on account of lower cost and higher prices. An average earnings before interest, taxes, depreciation and amortization (ebitda) margins of these companies improved nearly 600 basis points to 22.79% during the quarter.
Elara Capital, the brokerage firm expects the cement demand to accelerate once the economy recovers and housing demand picks up following the rise in income due to implementation of the Seventh Pay Commission recommendations later this year.
With the acceleration in demand and slowing capacity addition, we expect utilization to bottom out in FY16. Thus, we reiterate our long-term positive stance on the sector, it added.
Analysts at Systematix Shares & Stocks expect new capacity additions to taper over FY17-18 (24 metric tonnes) vs FY15-16 (+55 metric tonnes), leading to utilisation rising from 70% in FY16 to 73% in FY18e. This along with higher consolidation and pricing discipline shown by regional players are key to better price outlook going forward.
“We expect cost inflation at single digit despite freight and coal costs bouncing from recent lows. Thus, firm-to-better realisations are expected to compensate cost pressures and aid current profitability levels,” the brokerage firm said in a July report.
Besides these three, Mangalam Cement, Sanghi Industries and Saurashtra Cement are quoting at their respective 52-week highs on the bourses.
NCL Industries, KCP, JK Lakshmi Cement, Kakatiya Cement, Panyam Cement, Shree Digvijay Cement, Gujarat Sidhee Cement, OCL India and Dalmia Bharat up 1%-4% on the BSE, as compared to 0.12% decline in the S&P BSE Sensex at 12:48 pm.
Total 36 cement companies including large cap, so far declared their June quarter results, have posted a strong 84% year on year growth in their aggregate net profit at Rs 2,823 crore on account of lower cost and higher prices. An average earnings before interest, taxes, depreciation and amortization (ebitda) margins of these companies improved nearly 600 basis points to 22.79% during the quarter.
Elara Capital, the brokerage firm expects the cement demand to accelerate once the economy recovers and housing demand picks up following the rise in income due to implementation of the Seventh Pay Commission recommendations later this year.
With the acceleration in demand and slowing capacity addition, we expect utilization to bottom out in FY16. Thus, we reiterate our long-term positive stance on the sector, it added.
Analysts at Systematix Shares & Stocks expect new capacity additions to taper over FY17-18 (24 metric tonnes) vs FY15-16 (+55 metric tonnes), leading to utilisation rising from 70% in FY16 to 73% in FY18e. This along with higher consolidation and pricing discipline shown by regional players are key to better price outlook going forward.
“We expect cost inflation at single digit despite freight and coal costs bouncing from recent lows. Thus, firm-to-better realisations are expected to compensate cost pressures and aid current profitability levels,” the brokerage firm said in a July report.
| COMPANY | LATEST | PREV CLOSE | GAIN(%) |
| BARAK VALLEY | 24.50 | 22.65 | 8.17 |
| INDIA CEMENTS | 139.85 | 129.35 | 8.12 |
| PRISM CEMENT | 116.45 | 108.80 | 7.03 |
| NCL INDS. | 122.50 | 116.85 | 4.84 |
| HEIDELBERG CEM. | 138.75 | 132.75 | 4.52 |
| K C P | 96.00 | 92.15 | 4.18 |
| UDAIPUR CEMENT | 16.20 | 15.75 | 2.86 |
| BURNPUR CEMENT | 15.09 | 14.67 | 2.86 |
| MANGALAM CEMENT | 368.00 | 358.60 | 2.62 |
| SAURASHTRA CEM. | 83.65 | 81.70 | 2.39 |
| DALMIA BHAR. | 1478.90 | 1445.40 | 2.32 |
| JK LAKSHMI CEM. | 441.00 | 432.15 | 2.05 |
| ANDHRA CEMENTS | 7.97 | 7.81 | 2.05 |
| SHIVA CEMENT | 6.75 | 6.62 | 1.96 |
| KAKATIYA CEMENT | 354.10 | 348.30 | 1.67 |
| SANGHI INDS. | 83.00 | 81.65 | 1.65 |
| SAGAR CEMENTS | 643.55 | 635.05 | 1.34 |
| SH. DIGVIJAY CEM | 26.75 | 26.40 | 1.33 |
| ANJANI PORTLAND | 161.00 | 159.00 | 1.26 |
| GUJ. SIDHEE CEM. | 33.80 | 33.40 | 1.20 |
