Ambuja Cement has released the Dispatch and production number for April 2012. The production for the month of April has grown by just 5 per cent to 1.91 MT while the Dispatch has grown by just 1.6 per cent to 1.85 MT on YoY basis.
Ambuja Cement has released the Dispatch and production number for April 2012. The production for the month of April has grown by just 5 per cent to 1.91 MT while the Dispatch has grown by just 1.6 per cent to 1.85 MT on YoY basis. The growth in dispatch for the month of April has remained muted. This has raised the concern over the recent demand pick up as company has not been able to sell what it produced in the month of April. The lower dispatch numbers for the April month has come as a negative for us. One of the reasons for the lower demand can be attributed to the Monsoon in the June quarter which cyclically remains a lull period due to lower construction activity.
The company for the quarter reported decent financial numbers on the back of price hike and higher sales volume up by 9.9% on YoY basis which cyclically remains the best quarter for the cement industry due to peak construction period. During the March quarter 2012 cement companies hike the cement prices by Rs 20-25 to Rs 300/ 50KG bag.
However with demand slowing down the price will also start reducing in the June quarter. Lower cement prices with problems of high input cost such as coal, Fly ash and high Freight charges will impact the margins of the cement companies in the June quarter 2012.