Coal news and updates

Cement prices have corrected by Rs 4 per bag MoM on an all-India basis, with dealers suggesting that business has halved since the currency demonetisation even as companies maintain a lower impact on volumes. We lower our earnings estimates for FY2017 by 10-73% to factor the immediate impact of currency demonetisation, even as we cut FY2018E earnings by a lower 5-22% building for normalcy in operations over the next two quarters.

All-India cement prices came off by Rs 4 per bag MoM to R322 per bag — resilient in the post-demonetisation environment with on-the-ground activity having come to a near standstill. Cement prices have trended down for most part of the quarter, except for the west market that has largely held on to increases taken in October 2016.

For 3QFY17, prices have averaged R326 per bag — flat sequentially though up R16 per bag y-o-y. Sequential improvement will be seen in the west (+R20/bag q-o-q) and the south (+R5/bag q-o-q) as prices in central (-R12/bag q-o-q) and the north (-R13/bag q-o-q) trend lower. The sequential decline notwithstanding, cement prices in the north (+R31/bag y-o-y), central (+R32/bag y-o-y) and west (+Rs 32/bag y-o-y) for 3QFY17E will appear substantially better off compared with the same period last year.

Cement firms maintain there is limited impact on demand due to de-monetisation. But our dip-stick survey across 25 major cities suggests sales turnover has near-halved from normal levels.

Source: Financial Express