Sector Updates

Q1FY26 Earnings Preview - CEMENT

Oil prices decline, LPG under-recovery improves: A slew of concerns over trade tariffs and global GDP combined with increased supply of 1.2mnbopd resulted in Brent diving to below USD60/bbl for a while and then picking up subsequently to average USD68/bbl during the quarter, a decline from USD75.7/bbl in Q4FY25. Decline in oil prices would result in falling realizations of ~8% QoQ for ONGC and Oil India. Decline in oil prices would aid gross marketing margins on petrol and diesel sequentially from Rs10.4/6.4/lit to Rs12/10/lit respectively. Decline in benchmark LPG prices would also reduce...

Due to geopolitical tensions owing to the Iran-Israel war, the price of crude shot up to $74 even touching $75 briefly. This has a direct effect on prices of chemicals. This reflected in June-25 data, where all the chemicals in our coverage universe exhibited minor uptick in prices, barring Acetone and Acetic Acid. Acetone and Acetic Acid are not linked in the production process; hence the downward trajectory could be due to weakening end-use demand. Acetonitrile prices showed the steepest jump of 8% MoM. This does not bode well for Li-Ion battery manufacturers as it is used as a solvent, particularly in high performance...

In our monthly Hotels update we have summarized key events of the domestic hotel industry, new hotels signing/addition by key players during the month and pricing trend of key cities for June, 2025. We have analyzed pricing of 171 hotels with ~33,000 keys across 8 cities to understand the trend over last 24 months (Exhibit 18). After a healthy growth in ADR, the industry witnessed decline in ADR, primarily led by seasonality. Early monsoons in various parts of the country further dented travel plans and weighed on ADR. We anticipate the softness in ADR to continue for a couple of more months. However, we attribute this as a seasonal factor and overall positive momentum of the industry to continue led by demand-supply mismatch,...

Building Material companies under our coverage universe are expected to report single digit revenue growth due to weak demand, along with contraction in margins due to fluctuations in PVC resin prices in plastic pipe companies and tiles, due to oversupply in the domestic market, which has leads pricing pressure. We anticipate moderate volume growth of 5.2% YoY in plastic pipe sector. Tiles and bathware sectors are likely to experience single digit growth expecting demand to pick up in H2FY26. We expect coverage companies to register sales growth of 4.3% YoY, given correction in Finolex Ind revenue and...

We prefer Hero Motocorp and Bajaj Auto in 2Ws (TVS, Eicher seem fully valued at CMP); M&M (non-coverage) as a play in the PV/LCV/tractor segment, followed by Maruti in PVs. We also like Ashok Leyland in the CV space, followed by a close watch on Eicher (VECV) for any market share gains.

hikes the improvement in margins would either be flat or negligible due to missing operating leverage. We expect median revenue growth to decline by 1.2% QoQ in CC terms & grow 0.5% QoQ in USD terms. Currency volatility continues with major currencies like EUR and GBP having strengthened against USD by 5.9% and 7.6% QoQ, respectively, which will translate into tailwinds to the tune of 60-400bps QoQ in reported terms. Vertical wise, BFSI should continue its growth momentum, while hi-tech and ENU should also support growth for selective names. Manufacturing and...

We conducted channel checks of paint dealers across regions. Our interaction suggests that 1) 1Q has seen decent demand with QoQ improvement, however recovery remains slow 2) demand outlook remains positive led by lower inflation, interest rate cuts, tax reductions and normal monsoons. Asian Paints is experiencing a year-on-year decline in the West and South regions, sales in the East remained flat while north India sales trends show mid-high single digit growth. For Kansai Nerolac, the South market is weak, whereas other regions are performing well....

Banking sector (non-food) credit growth stood at 9.6% as on 13 Jun'25 vs ~8.8% in May'25 (vs ~11% in FY25). The latest sectoral deployment data showed that credit growth moderated in agri, industry and services sectors in May'25, partly attributable to high base. Agri loans stood to 7.5% in May'25 vs 9.2% in Apr'25. Loans to industries moderated to 4.8% in May'25 vs 6.6% in Apr'25, due to slowdown in particularly large industries. Services sector growth too softened to 8.7% vs 10.5% YoY in Apr'25. Growth in loans to NBFCs declined to -0.3% YoY in May'25 vs +2.9% YoY in Apr'25. However, loan to retail segment slightly moderated...