Coal news and updates

Market participants know well that the cement industry’s volume growth is likely to be muted in the seasonally weak September quarter due to subdued demand across India. The key therefore for the September quarter results is the movement in cement prices.

 

Cement companies having substantial exposure to northern and central India are expected to report stronger earnings growth compared to pan-India firms, some cement analysts say. They derive this optimism from the price trends seen in these regions.

 

On a year-on-year comparison, while pan-India firms will see realizations improve by a modest Rs4/bag, regional disparities continue to remain large with companies in the north reporting Rs35/bag year-on-year and central Rs25/bag year-on-year, brokerage firm Kotak Institutional Equities highlighted in a recent report. On the other hand, cement makers in the east and south will continue to see weakness in price trends, it said.

 

Robust realizations coupled with inventory gains from fuel, mainly petroleum coke, acquired at lower cost, would aid companies with a focus on the north and central regions to see the maximum improvement in operating margins in the second quarter of fiscal year 2017.

Source:Livemint.com