Cement firms likely to see profits halve in September quarter
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Domestic cement producers are likely to see their profits halve year on year in the September quarter as lower-than-usual volume growth and over three-year low prices of the building material hit realisations, analysts said. While lower pet coke prices will provide some respite to the cement makers, it will be inadequate to offset the impact of pricing on operating margins. Given that intense competition in the sector is expected to keep prices subdued in the near term, earnings downgrade is likely for the players, they added. The September quarter is generally weak for cement producers as demand is lower on account of the monsoon rains, which slows down construction activities. While volumes were 1-2% higher than the year-ago period, led by a pick-up in the last leg of the quarter, the overall quarter remained weak, with prices lower by 5-8% on year. “Multiple factors like delayed government spending post general elections, strong monsoo...