Motilal Oswal - MOSL: CEMENT-Prices ramping up slowly in north and central regions

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Motilal Oswal

MOSL: CEMENT-Prices ramping up slowly in north and central regions

CEMENT: Prices ramping up slowly in north and central regions; Cost pressures easing

All-India cement prices increased ~1% MoM in Nov’18 on account of price hikes in the north, central and west regions. Pricing scenario improved post the festive season of Diwali – companies are increasing prices in phases so that the markets are able to absorb such hikes. ACC and Ambuja have been refraining from increasing prices as it is their book closing quarter.
Cost pressure subsided in the month, as RIL reduced petcoke prices by INR300/t to INR9,350/t. Prices of imported coal (in INR), too, reduced by 8% MoM.
We prefer Shree Cement, given the pricing improvement in the north region. Also, with UTCEM winning the Binani assets, further consolidation in the industry should bode well for prices in the region. We also like Dalmia Bharat, given the prospects of its eastern operations driving profitability.

Prices in west increase led by hikes in Pune, Mumbai and Ahmedabad

Prices in west increased by 2% MoM in Nov’18, led by price hike of ~INR10/bag in Pune, ~INR5/bag in Mumbai and ~15/bag in Ahmedabad. Much of the hike came in after the festive season. Prices in Nagpur remained flat due to muted demand. Construction work in the region came to a halt as majority of the workforce comes in from Chhattisgarh, which is undergoing elections.

27/11/2018 6 EN

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Motilal Oswal

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MOSL: CEMENT-Prices ramping up slowly in north and central regions

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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