External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Thematic (Sector/Industry)

<ul><li>Healthy volumes; mixed pricing trend across regions: We estimate that our coverage universe of 15 companies will deliver 10/8% YoY/QoQ volume growth (three-year CAGR: +6%) in Q3FY23</li><li>We expect average utilisation of ~77% vs 72/74% QoQ/YoY. Cement prices increased ~2% QoQ across India in Q3</li><li>Prices increased ~4-6% QoQ each in the east and south regions, there was 1-2% rise in the west, while the north was flattish and the central region witnessed a ~1% correction QoQ</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Healthy volumes; mixed pricing trend across regions: We estimate that our coverage universe of 15 companies will deliver 10/8% YoY/QoQ volume growth (three-year CAGR: +6%) in Q3FY23We expect average utilisation of ~77% vs 72/74% QoQ/YoY. Cement prices increased ~2% QoQ across India in Q3Prices increased ~4-6% QoQ each in the east and south regions, there was 1-2% rise in the west, while the north was flattish and the central region witnessed a ~1% correction QoQContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement (Q3FY23 Results Preview): Decent volume offtake, recovery in profitability

<ul><li>Healthy volumes; mixed pricing trend across regions: We estimate our coverage universe of 15 companies to deliver 8% YoY volume growth (three-year CAGR: 8%) in Q2FY23</li><li>We estimate average utilisation of ~71% vs 78/70% QoQ/YoY. In our view, cement prices fell ~3% QoQ on pan-India basis in Q2</li><li>Prices fell 5-6% QoQ each in north and central regions, 3-4% each in east and west regions and ~1-2% in south</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Healthy volumes; mixed pricing trend across regions: We estimate our coverage universe of 15 companies to deliver 8% YoY volume growth (three-year CAGR: 8%) in Q2FY23We estimate average utilisation of ~71% vs 78/70% QoQ/YoY. In our view, cement prices fell ~3% QoQ on pan-India basis in Q2Prices fell 5-6% QoQ each in north and central regions, 3-4% each in east and west regions and ~1-2% in southContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement (Q2FY23 Results Preview): Healthy offtake; costs to peak out in Q2

<div><div><div><ul><li>High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.</li><li>Mixed realisation gains QoQ: While energy cost continues to rise QoQ, the industry could not fully pass on the inflation across all regions.</li><li>Cost inflation elevated: We estimate that overall fuel costs would soar 7/42% QoQ/YoY amid rising imported coal and pet coke prices.</li></ul><ul style="list-style-type: none;"><li> </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p></div></div></div>

High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.Mixed realisation gains QoQ: While energy cost continues to rise QoQ, the industry could not fully pass on the inflation across all regions.Cost inflation elevated: We estimate that overall fuel costs would soar 7/42% QoQ/YoY amid rising imported coal and pet coke prices. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement - Cost Inflation Continues, Margin Contracts

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

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Nirmal Bang is drawn from a diversity of professional backgrounds, and blend of experience, skill and dedication is shared with its clients. Nirmal Bang emphasizes adequate, thorough research local and world-wide developments, balancing these with the astute discovery of intrinsic values, synergies and growth. The aim is simply to help the investors to maximize their returns.

<div><div><div><div><ul><li>Weak seasonal demand and decline in prices against the backdrop of high input costs would mean muted realizations</li><li>The trend in cement pricing has been discouraging so far.</li><li>The news regarding CCI’s investigation on cement companies might be a factor for subdued pricing.</li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Weak seasonal demand and decline in prices against the backdrop of high input costs would mean muted realizationsThe trend in cement pricing has been discouraging so far.The news regarding CCI’s investigation on cement companies might be a factor for subdued pricing.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement Sector - Elevated Energy Costs to Weigh on Margins

<div><div><div><div><ul><li>Summary of change in recommendation of our coverage universe: We have cut targets prices for our covered companies by 10-30% on account of reduced earnings expectations as well as lower target multiples.</li></ul><div><div><div><div><ul><li>Near term earnings outlook weak and positive triggers missing: We expect earnings to remain weak for the cement sector for the next two quarters on account of elevated costs and weak realizations amid a seasonally weak demand period.</li></ul><div><div><div><div><ul><li>Reversal in coal and crude prices can offer some solace: We believe that high competitive intensity will subside once the inflationary pressures recede and hence reversal of higher coal and crude prices is important.</li></ul></div></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Summary of change in recommendation of our coverage universe: We have cut targets prices for our covered companies by 10-30% on account of reduced earnings expectations as well as lower target multiples.Near term earnings outlook weak and positive triggers missing: We expect earnings to remain weak for the cement sector for the next two quarters on account of elevated costs and weak realizations amid a seasonally weak demand period.Reversal in coal and crude prices can offer some solace: We believe that high competitive intensity will subside once the inflationary pressures recede and hence reversal of higher coal and crude prices is important.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement Sector - Headwinds Galore; Turning 'neutral' on the Sector

India

Nuvoco Vistas Corporation Limited provides construction materials. The Company offers cement, ready mix concrete, and aggregates. Nuvoco Vistas serves customers in India.

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Nuvoco Vistas (NUVOCO IN)

Cement (Q3FY23 Results Preview): Decent volume offtake, recovery in profitability

We estimate that our coverage universe of 15 companies will deliver 10/8% YoY/QoQ volume growth (three-year CAGR: +6%) in Q3FY23

HDFC Securities

Cement (Q2FY23 Results Preview): Healthy offtake; costs to peak out in Q2

Healthy volumes; mixed pricing trend across regions: We estimate our coverage universe of 15 companies to deliver 8% YoY volume growth (three-year...

HDFC Securities

Cement - Cost Inflation Continues, Margin Contracts

High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.

HDFC Securities

Cement Sector - Elevated Energy Costs to Weigh on Margins

1QFY23 earnings for the cement sector will be muted as we expect margin pressure to continue in the near term due to higher operating costs,...

Nirmal Bang

Cement Sector - Headwinds Galore; Turning 'neutral' on the Sector

We are turning ‘neutral’ on the cement sector as we believe that there are multiple headwinds, which will inhibit earnings growth and in turn lead...

Nirmal Bang

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