Cement Makers results In 4th Quarter
Operating income and volume growth of three of the five pan-India cement makers beat estimates in the quarter ended March. Of the five largest cement makers in the country, UltraTech Cement Ltd., Orient Cement Ltd. and Dalmia Bharat Ltd. reported better-than-estimated numbers. Lack of presence in the southern market and rise in power and freight costs weighed on the earnings of LafargeHolcimgrou
UltraTech Cement continued to outperform its peers after it clocked a 15 percent year-on-year volume growth. That compared with Ambuja Cement’s 2 percent and ACC’s 5 percent growth.
UltraTech’s sales volumes have been much stronger than the industry’s for at least five years, Nomura said.
In the last two years, it was driven by the Aditya Birla Group-owned cement maker’s acquisition of JaiprakashAssociates’ cement assets in 2017-18. While Orient Cement’s volumes reached an all-time high, Dalmia Bharat grew at a slower pace due to clinker-capacity constraints in the eastern region.
For ACC and Ambuja Cement, the biggest constraint was slow capacity expansion. ACC, in its annual report, acknowledged the risk of being left behind as rivals expand capacity.