Construction Materials share price target

Our channel checks suggest industry volumes are likely to report flat to low single-digit volume growth YoY (despite high base) during Aug’22 to ~29mnte, implying a relatively strong pan-India clinker utilisation at ~70% this monsoon.

Wood panel companies under our coverage reported healthy revenue growth in Q1FY23 aided by continued uptick in the housing market, shift of market from unorganised to organised sector, and wider acceptance of readymade furniture, which has driven demand for the MDF segment.

Our channel checks suggest improved demand recovery in Jun’22 led by premonsoon push, pick-up in infrastructure projects, reduction in prices of steel, cement, etc. and better manpower availability

South Prices fell by 2% QoQ: Region witnessed steep price hikes of Rs1520/bag at the beginning of quarter. However, prices could not sustain and settled down with fall of Rs5/bag QoQ due to intense competition for higher market share in wake of better demand. Karnataka/Tamil Nadu witnessed...

While international coal prices increased 14% QoQ, petcoke price declined 11% QoQ. Average diesel costs are also lower 3% QoQ due to excise cuts. With average cement price increase of 2.1%, we expect EBITDA/t to stay flat QoQ at | 943/t. However, YoY we expect EBITDA/tonne to decline...