OfBusiness Cement Dailies | 9th November 2023

Price

• Prices remain unchanged as of today, and expectations are high for a revision after the Diwali Festive.
• AAC Block ex Panipat is priced at Rs 2,500/cubic meter, and ex Nashik is priced at Rs 3,300/cubic meter. GST will be additional.

Demand and Supply

• The delay in supply in the northcentral region still persists. Demand in the northcentral region has decreased due to the upcoming festival week.

News

• Shree Cement reported robust Q2 earnings, with a 158.6% YoY increase in standalone profit after tax to Rs 491.3 crore, surpassing estimates. Revenue from operations rose by 21.3% to Rs 4,584.6 crore. Despite these positive results, the company’s shares fell by 1.17% on the BSE on November 8, trading at Rs 26,350.00 each. Shree Cement’s Q2 margin was slightly below analyst expectations at 19%, but significantly higher than the previous year. The company also approved a brownfield cement grinding capex of Rs 550 crore and the amalgamation of its subsidiaries, Shree Cement North Private Limited and Shree Cement East Private Limited, into the main company.
• Investor sentiment seems to have turned favorable towards Ultratech Cement, with a couple of brokerages upgrading their ratings to ‘buy’ in the last month, partly recovering a number of ratings cuts in the last year. The positive reversal in the outlook follows the cement company’s robust Q2FY24 earnings performance, showcasing substantial increases in revenue, profit, and earnings before interest, tax, depreciation, and amortization (EBITDA).
• UltraTech Cement has issued a US$73.5 million corporate guarantee in favor of Abu Dhabi Commercial Bank. The guarantee covers credit facilities availed by the group’s subsidiary UltraTech Middle East Investments.

OFB’s Opinion

• Demand is expected to remain low for the coming week due to the festival, and supply could also be delayed due to logistics disturbance on account of the festive mode.