Cement Q2 Results Preview - Quarter Impacted By Seasonality: Nirmal Bang

Nirmal Bang Report

Several factors impacted the demand in Q2 FY25, including delayed infrastructure activities following the general election, unavailability of sand, above-average monsoon rains, and flooding in various regions across the country.

We expect demand growth ~ 5% YoY in Q2 FY25 and full year growth ~7.5% YoY in FY25.

Pricing remained under pressure (declined 2-3% QoQ) across regions. Companies made multiple attempts to hike prices during the quarter. Still, due to the monsoon, floods, and lack of infrastructure activities, price hikes had to be rolled back, keeping cement realisations under pressure.

We expect demand to gradually improve once the monsoon recedes and government spending on infrastructure projects picks up. This will be followed by price hike announcements by companies across regions later in October FY25, which would aid H2 FY25 earnings.

The average Ebitda/tonne for our universe is expected to decline ~20% QoQ (Rs 150 - 170) to ~Rs 600 - 650/tonne.

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