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| Edited By: Pooja Sarkar |Source: DNA |Updated: Mar 30, 2018, 03:55 AM IST
Cement despatches grew in December after a decline in November.
Analysts expect the industry growth to be around 5.5% for the last month, up from a de-growth of 3.4% in November.
Swiss major Holcim-controlled ACC and Ambuja Cements saw a growth in their despatches. ACC despatches rose 2% to 1.92 million tonnes last month as compared with 1.88 mt in December 2009, and it produced 1.91 mt in December as compared with 1.86 mt in the same month last year.
Though sales rose this month, they were flat for the January-December period year on year, with despatches totalling 21.17 mt as compared with 21.36 mt for 2009, a drop of 0.8%.
ACC produced 21.21 mt for the whole year as against 21.38 mt in 2009, a drop of 0.8%.
Ambuja Cements saw a spurt in its despatches by 5.6% for December at 1.8 mt as compared to 1.7 mt last year. Its production saw a marginal increase from 1.73 mt to 1.78 mt.
Rupesh Sankhe, research analyst with Angel Broking, said, “Last year the growth was 11% for December because 2008 was a bad year, but this year it is at around 5.6%. Though cement manufacturers are maintaining prices in October-November, there has been a drop of 12-15% in production as compared with the last year.”
“Though the production is down, realisations are going up. We expect the topline to be flat for the sector and a decline of 30-40% (for full year) in bottomlines for companies such as ACC and Ambuja. South based companies could be on the verge of posting losses,” he said.
An analyst from a domestic brokerage said, “The year ending for ACC and Ambuja is in December so they want to sell at lower prices because they need to book better results. They are clearing off inventories. In Delhi last week cement prices were rolled back by `5-7 per bag and the demand for PPC product used in infrastructure projects has also slowed.”
“The results have been impacted for last few quarters due to increase in raw material costs which is not expected for this quarter as coal prices have gone up 5% sequentially from $100 per tonne to $105 per tonne. Last year during the same period it was $75-78 per tonne. Also, lead distance for the manufacturers has also come down,” the analyst said.
