Cement growth was suspended in the April-June quarter of 2010 after the second wave. COVID-19 (New Coronavirus Infection)However, he added that the sector is expected to recover after the monsoon, driven by the government’s infrastructure activities and the impetus for housing construction.
“FY21 proved to be a good year for Indians Cement sector..The confusion caused by COVID The pandemic created operational and demand challenges in the first half of 2009, and the recovery in the second half significantly improved the profitability of the sector for the full year. ”
In addition, cost rationalization and low-cost inventories played an important role in expanding the EBITDA (interest, tax, depreciation, pre-amortization) margin, rising 349 basis points to 24.3% in FY2009. It was.
“Price increases were made by cement players later in the checkout, further helping to improve profitability,” he said.
The report also said that operating profit growth could slow in 2010 as fuel inflation continues.
“Nevertheless, higher realizations, supported by price increases and product mix, may continue to support higher profitability,” he added.
Domestic cement consumption in the first half of FY2009 decreased by 8% year-on-year due to the turmoil related to COVID, but a significant recovery was seen in the second half of FY2009 (October to March) due to the strengthening of infrastructure and construction. .. National activity.
“According to our survey, sales growth of the top 10 cement players in 2009 was 2.6%, which is different from a 13.1% decrease in sales across the sector,” said Acuite Ratings. , “In our opinion, this clearly emphasizes the continued integration of large companies and their strengthening of their position in the market.”
In addition, the cement sector saw a serious headwind in demand early last year, benefiting from low prices for major operating costs such as petroleum coke and diesel, which account for 25-30% of total operating costs. Of the sector.
“But when petroleum coke prices rose 29% compared to the first half of 2009 and diesel prices rose 15%, the cost structure was challenged in the second half of 2009. Nevertheless, low-cost inventories Due to changes in availability and fuel mix, cement players will report stronger EBITDA margins. ”
He added that some companies have increased the amount of imported coal used to reduce the amount of petroleum coke consumed, and improving management efficiency also plays an important role in supporting the improvement of operating profit margins in FY2009.
In 2009, the cement sector had a capacity of 20 million tonnes in operation despite the uncertainty over the COVID-led turmoil.
“Cement capacity is expected to grow at a CAGR of 5% from 2010 to 2011, and 28 million tonnes of cement capacity is projected to operate this year,” he said.
,,,,and Indian cement The report added that it has already announced plans to further expand its capabilities in the medium term.
Cement stocks: Net profit of a major cement company hit by a pandemic surged 29.6% FY2009: Report
https://economictimes.indiatimes.com/markets/stocks/news/net-profit-of-big-cement-firms-surges-29-6-in-pandemic-hit-fy21-report/articleshow/83717460.cms Cement stocks: Net profit of a major cement company hit by a pandemic surged 29.6% FY2009: Report