Cement firms to see 21% slump in Q1 Ebitda/tonne: Jefferies
  1. Home
  2. Building Material
  3. Cement
  4. Cement firms to see 21% slump in Q1 Ebitda/tonne: Jefferies
Cement

Cement firms to see 21% slump in Q1 Ebitda/tonne: Jefferies

01 Jun 2022 CW Team
With a significant rise in input costs, the cement sector could experience a steep decline in its operating profit per tonne in the first quarter (Q1) of financial year 2022-23 (FY23), compared to a year ago. In fact, the year-on-year decline would be the deepest in the past 10 years.

Jefferies estimated that the average Ebitda/t for this quarter for cement companies under its coverage will decline by around Rs 451 year-on-year/Rs 45 quarter-on-quarter to Rs 958 (the YoY decline would be one of the highest in the past 10 years). Despite revival in volumes, an increase in input costs weighed on margins. International pet coke and coal prices are up 25-30% QoQ for Q1FY23. The brokerage’s analysts expect the increase in energy prices to reflect to some extent in Q1FY23, and its full impact to be felt in Q2FY23.

“We expect cement to report a 21% YoY Ebidta decline for 1QFY23 … the fall reflects lag in passing costs even as volume growth recovers to mid-teens YoY (soft base),” said the brokerage’s analysts in a recent report.

Companies have struggled to pass on the costs, especially those with exposure to the southern markets.

Also Read:
K Lakshmi launches new brand in central and eastern UP
Shree Cement to set up integrated cement unit in Guntur

Discover the Cement Expo! Click the button below to explore all the event details.

Visit Cement Expo Website

With a significant rise in input costs, the cement sector could experience a steep decline in its operating profit per tonne in the first quarter (Q1) of financial year 2022-23 (FY23), compared to a year ago. In fact, the year-on-year decline would be the deepest in the past 10 years. Jefferies estimated that the average Ebitda/t for this quarter for cement companies under its coverage will decline by around Rs 451 year-on-year/Rs 45 quarter-on-quarter to Rs 958 (the YoY decline would be one of the highest in the past 10 years). Despite revival in volumes, an increase in input costs weighed on margins. International pet coke and coal prices are up 25-30% QoQ for Q1FY23. The brokerage’s analysts expect the increase in energy prices to reflect to some extent in Q1FY23, and its full impact to be felt in Q2FY23. “We expect cement to report a 21% YoY Ebidta decline for 1QFY23 … the fall reflects lag in passing costs even as volume growth recovers to mid-teens YoY (soft base),” said the brokerage’s analysts in a recent report. Companies have struggled to pass on the costs, especially those with exposure to the southern markets. Also Read: K Lakshmi launches new brand in central and eastern UPShree Cement to set up integrated cement unit in Guntur

Previous
Nepal exports over 3,000 sacks of cement to India for first time

Related Stories

Gold Stories

Opinion Poll

Question : What are you most interested in Construction Technology?

Latest updates

ECONOMY & POLICY
06 Dec 2023

Bihar Cabinet Greenlights Progressive Electric Vehicle Policy

ECONOMY & POLICY
06 Dec 2023

PM GatiShakti Celebrates Two Years, Hosts 61st NPG Meeting

PORTS & SHIPPING
06 Dec 2023

Visakhapatnam Port Achieves Milestone records Historic Alumina Handling

Real Estate
06 Dec 2023

Indian Army Selects 34 In-House Innovations for Operational Solutions Development

Real Estate
06 Dec 2023

Housing Prices Surge in 41 Cities, Including Delhi and Mumbai

RAILWAYS & METRO RAIL
06 Dec 2023

Underwater Transit: Kolkata Metro Gears Up to Commence Operations Soon

RAILWAYS & METRO RAIL
06 Dec 2023

Noida Metro Seeks Approval for Aqua Line Metro Corridor Expansion

WATER & WASTE
06 Dec 2023

Tenders Floated for Integrated Water Management System in Haryana

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 81086 03000

Join us Telegram