- Q4 earnings performances of UltraTech Cement, Ambuja Cements, ACC, and Dalmia Bharat have shown mixed results, with some meeting expectations while others fell short.
- Despite the seasonal strength of the construction industry in the months of March, April, and May, the ongoing national elections are impacting construction activities and cement demand.
- Analysts predict a potential recovery in the second half of FY25, following the conclusion of the elections and the onset of the monsoon season.
This article provides an in-depth analysis of the Q4 earnings performances of major cement manufacturers and the factors influencing the cement demand outlook for the new financial year.
Q4 Earnings Performances: A Mixed Bag
Major cement manufacturers including UltraTech Cement, Ambuja Cements, ACC, and Dalmia Bharat have reported mixed results for their Q4 earnings performances. While some companies such as UltraTech and ACC exceeded expectations, others like Dalmia Bharat and Ambuja Cements fell short due to weaker than expected realizations.
Impact of Seasonal Strength and National Elections
The months of March, April, and May typically see a surge in construction activities, benefiting cement manufacturers. However, this year, the ongoing national elections are keeping government spending and labor availability under check, leading to subdued volumes and a lack of improvement in realizations. Analysts predict that this cautious trend may continue until the election results are declared.
Outlook for the New Financial Year
Despite the current challenges, the cement demand outlook for the new financial year remains strong. However, a meaningful recovery is not expected until the second half of FY25, following the conclusion of the elections and the onset of the monsoon season. This prediction is based on insights from analysts at Jefferies India Pvt Ltd and a domestic brokerage, who have conducted extensive channel checks and demand trend analysis.
Conclusion
The Q4 earnings performances of major cement manufacturers have shown mixed results, influenced by various factors such as the seasonal strength of the construction industry and the ongoing national elections. While the cement demand outlook for the new financial year remains strong, a meaningful recovery is not expected until the second half of FY25. Investors are advised to keep these factors in mind when making investment decisions in the cement sector.
