UltraTech Cement, Ambuja, ACC, Shree Cement, others: Muted April cement sales volumes, prices add to caution

Stock Market Today: UltraTech Cement , Ambuja Cements, ACC, Dalmia Bharat Q4 earnings performances have remained  a mixed bag. While some met expectations and few as UltraTech and even ACC performance came ahead of expectations, Dalmia Bharat and Ambuja Cements Q4 performance remined below expectations on weaker than expected realizations.

The months of March, April and May remain seasonally strong as  construction activities catch pace benefitting cement manufacturers till June before onset of monsoon takes place impacting construction activities.

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Though cement demand outlook during the new financial year remains strong, the ongoing national elections are keeping government  spending and labor availability under check impacting construction activities. Volumes are subdued and realizations improvement is yet to be seen. 

Analyst at a  domestic Brokerage on condition of anonymity said that said that he does not expect much uptick in demand and pricing till election results are declared and caution may persist on Cement stocks during the period. The monsoon season will set in thereafter, so meaningful recovery may be seen during the second Half of FY25

Analysts at Jefferies India Pvt Ltd in their report on demand trend based on their channel checks said that, they expect Industry volumes to be weak for the month, likely flat to lower year on year, reflecting impact of slowdown in construction activity due to National Elections. 

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While April demand remained subdued, analysts channel checks suggest price hikes attempted at start of April failed to sustain.  

Analysts at Jefferies said that their channel checks show price increased moderately by 1% month on month in April and Q1 till date is still 1% lower sequentially.  As per Jefferies channel checks dealers are not expecting any price hike till the conclusion of elections  and some said June hikes a possibility. 

The volumes also have dipped post year-end push (in March) suggest April volumes, which are significantly lower month on month and also likely flat to lower year-on-year as per Jefferies report. 

As per Jefferies weak pricing and volume would dampen Q1 unit Ebitda, only partly offset by softer variable cost and cost saving initiatives by companies.

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