India Cements will be reporting its third-quarter earnings today and the Street is expecting the topline to grow by around 8.5 percent. The operating profit is likely to degrow by around 13 percent, leading to margin compression of around 250-300 basis points (bps). The sales numbers are expected to come at 8.5-9 percent. According to CNBC-TV18’s poll, the profit is expected to stand at around Rs 3 crore.
Sales volumes should come in higher by around 5 percent a little more than 3 million tonnes, that is what supports the topline. In addition to that, the volumes in south India have not been a problem because demand has been quite healthy out there.
Q3FY19: Sales Volumes
-Expected (GU)5% at 3.05 mt vs 2.9 mt
-Healthy demand from the southern region
-Estimate realisations to decline by 2% QoQ due to fall in cement prices in South
Q3: Margin Compression Likely
-Due to weak realisation and increase in fuel costs
-Profitability in South is lower in past 4 qtrs due to subdued prices & high costs
-Crude prices have come off but are expected to be higher on a YoY basis
Q3FY19: Key Issues To Watch
-Visibility on demand recovery in South
-Pricing outlook in South India