Cement Q1 Preview: Analysts Predict Mixed Performance With Declining Realisations, Rising Volumes

Cement manufacturers in India will likely see a mix of outcomes in the April-June quarter, according to analysts, as they expect realisations for cement manufacturers to drop as cement prices fell further during this period. However, volume growth is projected on a year-on-year basis, with companies like UltraTech Cement Ltd., Shree Cement Ltd., and Ambuja Cements Ltd. showing notable increases in volumes.

Despite weak realisations, margins are set to improve for certain companies, according to analysts.

Analysts highlight that UltraTech Cement Ltd., Shree Cement Ltd., and JK Cements Ltd. will likely show significant margin improvements. Additionally, while some companies might see a decline in average Ebitda per tonne, a few, including UltraTech Cement and Shree Cement, are expected to maintain strong Ebitda levels.

Revenue of Orient Cement Ltd., Ramco Cements Ltd., and UltraTech Cement Ltd. could increase on an annualised basis by 12.2%, 7.5%, and 5.8%, respectively, in the first quarter of fiscal 2025, according to analysts consensus estimates tracked by Bloomberg. Dalmia Bharat Ltd. and JK Lakshmi Cement Ltd.,, on the other hand, could see a 23.3% and 7.3% drop in their respective revenues, Bloomberg data showed.

Here’s what analysts expect from cement companies for first quarter results of the current fiscal.

• Realisations for cement manufacturers are projected to decline by 2.5% on a sequential basis as cement prices fell further in the April-June period.

• Volumes are anticipated to grow by 8% on an annual basis, with ACC Ltd. and Ambuja Cements Ltd. reporting healthy double-digit volume growth of 14% and 13%, respectively.

• Margins are expected to rise by 150 basis points year-on-year.

• Shree Cements, JK Cements, and UltraTech Cement are forecasted to show the highest margin improvement.

• Blended realisation is projected to fall by 3% sequentially for the April-June quarter as pan-India average cement prices saw a Rs 10 per bag decline during the period.

• Volume growth for the coverage universe is anticipated to increase by 4% year-on-year in the first quarter of the ongoing financial year.

• UltraTech Cement Ltd. is expected to register a 5% volume growth, outpacing the industry due to recent capacity expansion and continued market share gains.

• Shree Cement Ltd., Dalmia Bharat Ltd., Ramco Cements Ltd., and JK Cement Ltd. are forecasted to see volume growth of 4-6%, while Ambuja Cements Ltd. might experience flattish volume growth on a consolidated level.

• Average Ebitda per tonne could decline due to weak realisations and negative leverage.

• A few players, such as UltraTech Cement Ltd. and Shree Cement Ltd., are expected to maintain an Ebitda per tonne level of over Rs 1000.

• Ambuja Cements (consolidated), Dalmia Bharat Ltd., Ramco Cement Ltd., and Birla Corporation Ltd. might register an Ebitda per tonne of Rs 700-900.

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