PREVIEW: Indian Cement Makers To Post Higher Quarterly Profits
January 19 2012 - 12:27AM
Dow Jones News
TAKING THE PULSE: Indian cement companies are expected to post
higher net profit and revenue in the quarter ended Dec. 31, helped
a rise in product prices and increased sales volumes.
According to Systematix Shares & Stocks, these companies are
likely to post an improvement of 100-700 basis points in operating
margins despite higher fuel and freight costs, as product prices
rose 18%-26% from a year earlier.
COMPANIES TO WATCH:
Ultratech Cement Ltd. (532538.BY) - Reporting Jan 21
Market Expectations: The Aditya Birla group company is expected
to post a 48% rise in net profit to INR4.72 billion and a 21% rise
in sales to INR44.82 billion, according to the average of estimates
from 10 analysts polled by Dow Jones Newswires.
Key Issues: According to brokerage Prabhudas Lilladher, costs
likely rose 14% due to higher fuel and freight expenses, but its
operating margin still likely expanded 411 basis points from a year
earlier to 23.2%.
ACC Ltd. (500410.BY) - Reporting date yet to be announced
Market Expectations: The Indian unit of Swiss cement-maker
Holcim Ltd. is expected to post a 53% rise in net profit to INR2.39
billion and 23.5% growth in sales to INR24.18 billion in the past
quarter, show the average of estimates from 10 analysts.
Key Issues: "We expect operating profit margin [at ACC] to
improve 500 basis points on year to 15.7%, driven by higher
realizations [product prices]," said Motilal Oswal Securities.
Ambuja Cements Ltd. (500425.BY) - Reporting date yet to be
announced
Market Expectations: The company, also a unit of Holcim, is
projected to post a 57% rise in net profit to INR3.02 billion,
according to estimates from 10 analysts. Its sales are expected to
increase 28% to INR22.84 billion.
Key Issues: Edelweiss Securities expects Ambuja's sales to
increase 10%. According to ICICI Securities, the company's average
product prices in the past quarter rose 20% from a year earlier to
INR4,249 a metric ton.
-By Prasenjit Bhattacharya, Dow Jones Newswires;
91-11-4356-3358; prasenjit.bhattacharya@dowjones.com