IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, in a recent report says that cement despatches for the month of August were moderate due to severe monsoon.
Based on initial cement despatch numbers, the brokerage estimates industry despatches to have increased 4-6% YoY for August 2011 (grew 10% in July and 2% in August YoY).
According to the report, August despatches of Ambuja Cements (ACL), ACC and Jaiprakash Associates increased 3%, 20% and 21% YoY, respectively.
The moderate growth is attributable to flooding in different parts of the country (August rainfall was 10% higher than the long-period average) and a truckers strike for a week in the south.
In the past one month, although cement prices declined in the northern and central regions they increased in the western and eastern regions. Prices were largely stable in the southern region.
Dealers expect cement prices to increase post monsoon.
“We expect demand growth to accelerate in the coming quarters with likely revival in demand in the rural and infrastructure segments,” IIFL says.
The report was published by IIFL’s Institutional Equities Research desk.
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