Cement Q2 Results Preview - Pall Of Gloom Intensifies Amid Optimism For Sunshine: ICICI Securities

ICICI Securities Report

Sustained competitive intensity is set to mark Q2 as yet another weak quarter in FY25 – seasonality-led QoQ decline notwithstanding. Impact of ~7–8% YoY drop in cement prices (down 2–3% QoQ) is amplified by other usual suspects like –

1. low volumes – owing to heavy monsoons and delayed Union Budget (which impacts government spending); and

2. low operating leverage.

We project coverage Ebitda to plunge 26% YoY (down 16% QoQ in H1 FY25). While Street may find solace in the ‘bottoming-out of margins’ theory (played after Q2 each year with hopes of revival in H2), the cement sector could well be staring at yet another bout of earnings downgrade (for consensus as well as our estimate for FY25 on top of those seen post Q1 FY25).

With competitive intensity unlikely to abate over the next few years and ‘consolidation virtues’ proving to be a myth so far, we see risk to FY26 earnings as well. We stay neutral on the sector.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.