Q3 result preview: Building material companies expected to post strong volume growth with margin improvement
Also Read: Q3 result preview: IT firms expected to post muted revenue, subdued profit amid weak demand “We remain positive on the sector considering buoyancy in the real estate market; government’s focus on housing, sanitation and infrastructure; improvement in agriculture segment with normalization in raw material prices; pick-up in exports and increase in branded or large players market share. In Q3FY24, the plastic pipe sector is expected to report EBITDA margin expansion of 230 bps YoY to 14.7% with sequential stability in raw material prices.
Sales volume is expected to grow by 11.8%YoY on a higher base. According to the brokerage firm, demand continues to be healthy mainly in the plumbing segment even after a seasonally weak quarter.
Supreme Industries and Astral are expected to deliver strong volume growth of 16% and 17% YoY in the Pipe & Fittings segment on a higher base of the previous year same quarter. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Tiles & Bathware In the Tiles & Bathware segment, Prabhudas Lilladher expects Kajaria Ceramics to report revenue growth of 6.9% YoY mainly with lower tiles volume growth of 7.3% YoY.
EBITDA margin is expected to improve to 16.0% on account of reduction in fuel expenses, gas prices & use of alternate fuel. Cera Sanitaryware is expected to witness revenue growth of 4.1% YoY due to moderate growth in Faucets and Sanitary business, expected to grow by 8% and 4% YoY.
The company is expected to report an operating margin of 16.4%, flat YoY, with PAT growth of 5.0% YoY. The brokerage has reduced Cera Sanitaryware’s earning estimates for FY24 by 3.7% to factor slowdown
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