Coal news and updates

Cement cos to see mixed fortunes in Q4FY14

April 10: India’s cement industry is expected to see mixed results in the quarter ended March 2014, with north based plants reporting sharp increase in average realisation but south based plants suffering a decline, an analyst’s report said.

Companies in the north, central and east regions are likely to report sharp increase in average realisations led by seasonal uptick in demand coupled with supply shocks at Binani Cement, the report by ICICI Securities said.

In south India, the industry may report ~6% QoQ drop in average realisation owing to muted demand growth.

“Despite low base, industry volumes have likely grown only 3.7% YoY / 13% QoQ to 69 mnte implying lower utilisations at 79% versus 81% YoY,” the report said.

With sharp price hikes in the North and Central regions, average realisation is expected to be up 3% YoY/4.5% QoQ to Rs4,200/ton.

“With cost escalations still at 5-6% YoY owing to higher raw material and freight costs, we expect average EBITDA/te to decline by 8% YoY to Rs830/ton. However, average EBITDA/ton would still increase by ~Rs200/ton QoQ.