I feel in such circumstances AP based companies like Andhra Cement, Priya Cement, Kakatiya Cements etc., shall also do well
ekamber On Oct 20, 3:00 pm, "Sukumar.N" <[EMAIL PROTECTED]> wrote: > MUMBAI: A clear pattern is evident, if one goes by the results > declared by cement companies. Companies with a strong focus on > southern and western markets stand to gain and should be the stocks > investors should pick, say analysts. Results declared by Ultra Tech > and JK Lakshmi reflect just that. > > Analysts point out that stocks with a distinct focus on southern and > western markets like India Cement, Madras Cements and ACC, could be > the preferred stocks for investors, given that price realisations are > still strong on a year-on-year basis in the September 2008 quarter. In > contrast, the northern and central markets have declined on a y-o-y > basis in Q2 FY 09. > > India Cements and Madras Cements derive an overwhelming majority of > sales in southern markets, while ACC derives nearly 19 per cent of its > sales from southern markets and 13-14 % from western markets, say > analysts. > > Ultra Tech, which is focused on southern (about 23 % of total > despatches), western (52% of despatches) and eastern (25% of > despatches) India, has grown its realisations on a y-o-y basis in the > September 2008 quarter, in a bid to partially offset rising input > costs, like imported coal. In contrast, JK Lakshmi, which is largely > focused on northern and central markets, saw a decline in its net > cement realisations in Q2 FY 09. > > This comes at a time when the Cement Manufacturer's Association has > also highlighted that cement consumption in the markets of northern > and central India has a shown a marked slowdown between April-August. > > In the case of Ultra Tech Cement, its combined cement and clinker > sales amounted to 3.98 million tonne in September 2008 quarter, a > growth of 13 per cent y-o-y. In the domestic market alone, the > company's cement sales were 3.23 million tonnes, a rise of 3 per cent > y-o-y in Q2 FY 09, with its net realisations at Rs 3,468 per tonne, a > rise of 7 per cent y-o-y. In addition, its blended realisations > (cement plus clinker) also rose 3.9 per cent y-o-y to Rs 3507 per > tonnes in the last tonne. > > Nevertheless, the company has only been able to partially offset > higher input costs, like coal via higher prices realisations, as its > operating profit margins declined 660 basis points y-o-y to 22.4 per > cent in the September 2008 quarter. > > Meanwhile, Ultra Tech has started commercial production of clinker > from its expansion at Andhra Pradesh and cement from the grinding unit > in Karnataka. The company highlighted that upon complete commissioning > of capacity at Andhra Pradesh, the company's total capacity will > increase to 23.1 million tonnes by the end of CY 08. > > In the case of JK Lakshmi Cement, the company's total sales were 9.74 > lakh tonnes in the September 2008 quarter, a rise of 12.1 per cent y-o- > y. However, its cement sales were 8.72 lakh tonne in Q2 FY 09, a rise > of 7.8 per cent y-o-y, with its blended realisations (cement plus > clinker) declining 2.2 per cent y-o-y to Rs 3011 per tonne, point out > analysts at domestic brokerage houses. > > N.Sukumar > Research Analystwww.kences1.blogspot.com --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
