Economy & Market

Strong pricing of cement to push up earnings: Report

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Motilal Oswal’s research report expects strong earnings growth for cement sector to drive stock performance, hereon. 1QFY13 numbers decipher more positives, no negatives.The cement majors have reported strong numbers for 1QFY13 (EBITDA 9-18 per cent ahead of estimates), amidst a mixed bag of expectations improvement in operations coupled with regulatory concerns post the adverse verdict by the Competition Commission of India (CCI).The robust performance is attributable to strong quater on quarter improvement in realisations (6-8 per cent), and (2) in-line volumes and cost push (which has been showing signs of stabilisation). Given the positive outlook, the report has upgraded the earnings estimates (4-11 per cent for ACC, Ambuja and UltraTech), backed by 10-12 per cent upward revision in realisation assumptions.

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