UltraTech Cement, Ambuja Cements, India Cements and HeidelbergCement India were up 3 per cent each. ACC, Dalmia Bharat, Star Cement and JK Cement were up 2 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.58 per cent at 60,637 at 09:36 AM.
Finance Minister Nirmala Sitharaman on Tuesday indicated that the government could be open to considering a reduction in the GST on cement, a long-standing demand of the infrastructure sector, if the GST Council agrees. CLICK HERE FOR FULL REPORT
Meanwhile, analysts at Emkay Global Financial Services expect the industry’s profitability to increase by Rs 150-200/ton QoQ in January-March quarter (Q4FY23), mainly led by input cost savings and higher operating leverage. International petcoke prices corrected by >35 per cent from their peak (in Apr-22) at US$175/ton. Despite 35-50 per cent correction in South Africa/Australian non-coking coal prices in the past few months, petcoke consumption still stood 10-15 per cent cheaper than coal on per Kcal basis, the brokerage firm said in sector update.
Cement companies are attempting price hikes of Rs 5-15/bag across regions in February 2023. Absorption of such hikes will be revealed over the next few days, the note added.
While an improvement in margins is expected to be visible from July- September quarter (Q3FY23) onwards, a sustainable correction in energy prices would be crucial for a further improvement in profitability given the limitations in price hikes. Notwithstanding near-term challenges, the demand outlook is expected to remain strong, going forward, considering upturn in housing cycle and step-up in government spending towards infra projects in the run-up to upcoming general elections, ICICI Securities said in cement sector result preview.
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