Kotak sees margins firming up in H2 for Indian cement companies

Ramco Cements

24/11/2023 09:37

** Kotak Institutional Equities expects margins to firm up
in 2HFY2 after a muted Q2 for Indian cement cos 
    ** Estimates 250-300 rupees/ton higher operating margins in
2HFY24 vs H1
    ** Cos could see higher margins on higher cement prices,
muted costs and operating leverage due to seasonality, brokerage
says
    ** Says Q3 cement prices 4-5% qoq higher than Q2, led by
hikes in Sept-Oct
    ** Adds pet coke and thermal coal prices have recovered from
July 2023 lows, but remain 10-15% lower than H1CY23 average
    ** Remain constructive on cement sector prospects, given
robust demand, rising utilisation and up-trend in margins in
medium term - Kotak
    ** Recommends adding Dalmia Bharat  DALB.NS  and selling
Ramco Cements  TRCE.NS , Shree Cement  SHCM.NS 
    ** Dalmia shares up 2.4%, while Ramco and Shree Cement down
0.5% and 1%, respectively

 (Reporting by Sethuraman NR in Bengaluru)
 ((Sethuraman.NR@thomsonreuters.com; (+91 9945291420); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))