PREVIEW: India Cement Makers May Post Bigger Profits, Sales on Rising Demand

  By Prasenjit Bhattacharya 
 

TAKING THE PULSE: Indian cement companies are expected to post higher net profits and sales in the quarter ended June 30 thanks to better product prices and increases in sales volumes.

However, gains in profits for most cement companies will be pared by rising costs owing to higher railway-freight charges. Besides, rupee depreciation will increase the cost of imported coal, a key raw material and fuel for the industry, according to brokerage Kotak Securities.

COMPANIES TO WATCH:

ACC Ltd (500410.BY) - Reporting July 26

Market Expectations: An average estimate of six analysts forecast net profit for the Indian unit of Swiss cement maker Holcim Ltd. to rise 9% to 3.66 billion rupees ($66 million) while sales are expected to increase 13.5% to 27.28 billion rupees.

Key Issues: Brokerage ICICI Securities Ltd. said product prices have increased 14% on year to 4,606 rupees a metric ton while its operating profit a ton produced is expected to rise 23% to 1,142 rupees.

Ambuja Cements Ltd. (500425.BY) - Reporting July 26

Market Expectations: An average estimate of five analysts forecast the Holcim unit's net profit to rise 31% to 4.54 billion rupees while sales are expected to rise 17% to 25.43 billion rupees.

Key Issues: Kotak Securities said sales volume will grow 5% on year while average product prices are expected to rise by 10 rupees a 50-kilogram bag on quarter.

Ultratech Cement Ltd. (532538.BY) - Reporting July 20

Market Expectations: An average estimate of six analysts forecast the Aditya Birla group company to post a 15% rise in sales to 50.22 billion rupees while net profit is expected to increase 4% to 7.1 billion rupees.

Key Issues: According to Motilal Oswal Securities cement sales volume will grow 6% on year while product prices increased by 6.7% to 4,014 rupees a ton.

 
 
  Write to Prasenjit Bhattacharya at [e-mail] 
 

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