Jul 11, 2002|
Cement: Dispatches cheer
The new financial year has started well for most cement companies. Good housing demand remains the main driver for the sector. In the first quarter, ACC and Grasim have emerged as the front-runners as far as dispatches are concerned.
Cement dispatches: Healthy trend
|YoY growth (%)
ACC has proven without doubt how focus on core operations and restructuring can go a long way in turning around the fortunes of a company. ACC, with its wide reach, has ensured that it is in a good position to cater to demand from various regions of the country. ACC has shown an average growth of 19.2% YoY in its 1QFY03 dispatches. Grasim, on the other hand, has reported a 12% YoY growth in cement dispatches while Gujarat Ambuja and L&T reported, a lower but respectable, 10% and 7.2% YoY growth.
A closer look will reveal that ACC’s dispatch growth figures are skewed to a certain extent. The base for calculation of ACC’s dispatch numbers has been low, as in the same period last year the company was still grappling with operational issues. This has led to higher growth figures. Also, cement demand had not picked up until second half of FY02 allowing for the respectable dispatch numbers. In case of Gujarat Ambuja the low dispatch growth figures do not necessarily mean that dispatches have been poor, as it experienced the opposite effect of ACC.
The dispatches in the first two months of the quarter for most of the major cement manufacturers have been good. The dispatches have however slackened in the month of June due to the onset of monsoons. Cement prices have however remained depressed over the first quarter of FY03. Cement demand is expected to pick up post monsoon. Recent reports also indicate that major manufacturers, once again, are expected to come together to restrict production in order to firm up prices.
All in all the year has started well for cement producers across the country. The demand out look looks healthy with infrastructure projects acting as triggers. Post monsoon demand spurt coupled with production adjustments is likely to improve realisations for most cement producers. Considering the long-term prospects of the industry, cement companies with good business fundamentals and a strong focus on core operations are likely to repeat recent performances.
More Views on News
Aug 11, 2017
UltraTech Cement completed the acquisition of cement plants of Jaiprakash Associates Limited (JAL) and Jaypee Cement Corporation Limited (JCCL) during the quarter ended June 2017.
Aug 11, 2017
While topline witnessed growth on the back of higher cement sale volumes, a 50.5% YoY fall in other income weighed on Ambuja's bottomline during the quarter ending June 2017.
Jul 20, 2017
Expanded capacity helped ACC strengthen its market presence in eastern region during the quarter ended June 2017.
May 18, 2017
Cement demand was weak because of subdued housing demand, volatile cement prices, and rising fuel costs.
May 8, 2017
Stock price jumps up on Ambuja-ACC merger talks...
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407