Q4 could be a bumper quarter after a long time for the cement sector: Mangesh Bhadang

economictimes.indiatimes.com:

Mangesh Bhadang, Senior VP, Centrum Broking, says December has seen substantial cement price hikes in the non-trade segment. There have been some hikes in the trade segment as well. That is going to have a very positive effect on the realisation of cement companies. So far, the higher prices have sustained and have been absorbed in the market. So, Q4 could be a bumper quarter after a long time for the cement sector.

What do you make of the earnings that we have till now because overall in the last couple of months or so, we have seen a lot of these upgrades and positive notes flowing in on the cement counters where hopes were pinning on some of the price hike stability. Other than that, the realisation expectation was positive. But given the earnings disappointment, do you feel that the most of the disappointment in Q3 is already priced in and the analysts are now looking for the way forward in terms of better realisation and pricing?
Mangesh Bhadang: As you rightly said, anyway we were expecting that Q3 will not be a blockbuster quarter, but because Q2 had been so weak, sequential improvement could definitely be there. Out of the cement results that have been declared, Dalmia Bharat probably was the right comparable to look at for the industry wide points that we can take out.

So, while the realisations were probably better, volumes were down for the company and overall profitability in terms of EBITDA per tonne improved by around Rs 110 on a QoQ basis whereas ideally it should have been up by at least 160, 170.