Open ICICI
3-in-1 Account
Manage your Savings, Demat and Trading Account conveniently at one place
- 10 Nov 2023
- ICICI Securities
-
Share
-
-
-
-
-
CEMENT VOLUMES IMPACTED DUE TO HEAVY RAINS; HOWEVER, MARGINS IMPROVE ON LOWER COSTS
STARCEMENT - 212 Change: 2.12 (1.01 %)News: Revenue declined by 1.5% YoY (-23.0% QoQ) to Rs 585.3 crore as cement sales volume grew marginally by 0.6% YoY (-23% QoQ) to 0.896 million tonnes (mtpa) with lower realisations (-2.1% YoY, flat QoQ). However, EBITDA increased by 41.5% YoY (-23.8% QoQ) to Rs 98.6 crore as margin improved substantially on lower raw material cost and freight cost. EBITDA/ton was up by 40.7% YoY (-1% QoQ) to Rs 1100/ton vs Rs 782/ton in Q2FY23. Thus, on account of margin improvement, PAT increased by 31.0% YoY (-56.4% YoY) to Rs 40.7 crore. H1FY24 revenue growth stands at 6.9% YoY with 10.1% YoY volume growth and 3% YoY lower realisation. EBITDA/ton for H1FY24 stands at Rs 1106/ton vs Rs 1036/ton in H1FY23.
Views: Cement volumes remained muted in Q2FY24 as demand weakened during the quarter due to heavy rains in north-east region. Also, maintenance shutdown taken by the company impacted the volume growth. Going ahead, company is looking for volume growth of 13-14% YoY in FY24, implying 15-16% growth in H2FY24. In the longer term, volume growth for the company is expected to remain strong led by capacity expansions and robust demand in north-east region. Company is in process of expanding its clinker & cement capacity to 5.8 mtpa & 9.7 mtpa respectively by FY25E (with the addition of 3 mtpa clinker at Meghalaya and 2 mtpa cement grinding facilities each at Guwahati and Silchar). Margins are also expected to improve further in 2HFY24 and FY25, led by operational efficiencies and positive operating leverage.
Impact: Neutral