Cement Sector Update - India Cement Industry peers are trading at 9.8x EV/E and USD 119/t on FY23E By JM Financial
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TABLE OF CONTENTS
INDUSTRY VALUATIONS
India Cement Industry peers are trading at 9.8x EV/E and USD 119/t on FY23E
PRICE TRENDS
All India Cement prices in Aug-21 changed -2% MoM, -4% QoQ, 1% YoY
VOLUME TRENDS
Industry production in Jul’21 was 28.3mnT; 16.6% MoM, 7.5% YoY
COST COMPONENT TRENDS
Petcoke/Coal/Diesel prices have changed by 26%/59%/9% QoQ and 96%/90%/20% YoY
PER TONNE IMPACT
Expect Power costs to increase by INR 187/t and Freight cost by INR 36/t QoQ
QUARTERLY MATRIX
Volumes are up 44% YoY; Realisation are up 6.7% QoQ; EBITDA/t is up 4.9% YoY in 1Q
DEMAND TRENDS
We expect 10-12% growth in cement volumes in FY22E
TOP PICKS
We are positive on Ultratech, Dalmia Bharat and JK Lakshmi
NEWS HIGHLIGHTS FROM THE WEEK
* JK cement plans to be 23MTPA player by 2023: JK Cement intends to increase capacity to 23MTPA in next two years from 15MTPA now by expanding footprint in North and central regions. Company has earmarked INR 29.7bn of capex for this project.
* Cement players to put 175MW of WHR in FY22: Major cement companies will invest INR 17bn in two fiscal years ending FY22 to set up 175MW of WHR capacity as per ICRA..
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