The top three domestic cement players ? ACC, Ambuja Cements and UltraTech Cement (UltraTech) ? saw a mixed performance in their cement despatches for January 2011.
ACC’s despatches for the month of January grew 7.32% year-on-year (y-o-y) and Ambuja?s despatches for the month went up 5.32%. However, the Aditya Birla Groups?s Ultratech Cement witnessed a disappointing performance during the month with despatches declining by 0.7% to 3.3 million tonne. According to experts, despatches for January are expected to largely remain flat as demand failed to grow as anticipated.
The 280-million tonne Indian cement industry reported a 3% year-on-year drop in despatches in December 2010, with a 6% despatches fall in November 2010. According to dealers, demand from the infrastructure segment has improved marginally and this was expected to result in positive volume growth for December 2010, which, however, did not happen.
The volume growth in January 2011 is better when considered on a sequential basis, on account of a pick up in infrastructure activity.
?The performance of UltraTech during the month was poor compared to other large players. However, on a sequential basis, the company has posted a positive growth in its despatches, which grew by 2.1%,? said a Sharekhan report.
Similarly, JK Lakshmi Cement despatches for January 2011 were also down 19% to 4.12 million tonnes from 5.06 million tonnes. Dalmia Cement and OCL, on the other hand, reported a despatch growth of 32% and 23%, respectively, in January.
For the full year, that is, January to December 2010, ACC reported a marginal slide in despatches by 0.90% to 21.17 million tonnes due to delay in capacity addition.
According to an IIFL report, Holcim group companies, ACC and Ambuja Cements, reported growth of 2% and 6% respectively in December 2010 as new capacities commenced in the past 2-3 quarters started stabilising. ?Dealers indicated that MNC players were pushing volumes by giving huge discounts in the northern and eastern regions to meet year-end targets. Sequential improvement is expected in despatches for the industry in 4QFY11 which coincides with the peak construction season,? said J Radhakrishnan, an analyst with IIFL in his report.
