Equity Research INDIA

March 23, 2022

BSE Sensex: 57989 Cement
ICICI Securities Limited
is the author and Demand seems improving; prices to follow
distributor of this report
As per our channel checks, demand seems to be improving in Mar’22 and may see
>17-18% MoM and low-single digit YoY growth after having declined marginally
Sector update YoY for the past three months. Industry may post highest-ever volumes in Mar’22
(~38mnte) with 91% utilisation despite high base of Mar’21, in our view. We believe
Q1FY23E may see stronger 10-15% YoY demand growth aided by low-base of
Top picks Q1FY22 impacted by second covid wave. While average pan-India prices are up
5% YoY in Q4FY22, they would still likely fall short of sharp cost increases YoY.
 UltraTech Cement Besides, current average fuel prices (which would impact in Q1FY23) are still ~30%
higher than Q3FY22 fuel consumption rate necessitating further ~Rs40/bag (10%)
 Ambuja Cement
QoQ price hike in Q1FY23E which remains a key trigger for the sector. UTCEM,
 Shree Cement ACEM and SRCM remain our top picks. We also like JKCE and TRCL. Key risks:
Lower demand / prices and sharp costs escalations.
 Key investor concern and reason for sector underperformance - Why sector
has not been able to pass-on cost increases? In our view, 1. cost increases have
been sharp to the extent of ~Rs450/te (12-13% YoY) in FY22 due to doubling of
average fuel prices YoY and sharp diesel and other cost increases. 2. demand in
East and Central regions was impacted in H2CY21 due to unseasonal rains,
unavailability of sand etc not allowing sufficient price hikes in those regions, and 3.
Average South prices remained broadly flat YoY for full FY22 as prices were already
hiked by 15% YoY in FY21.
 What may change? 1. Demand may improve (as seen in Mar’22) owing to higher
government spend on infrastructure and housing (especially in last two years before
general elections). 2. Cost increases may be transient – fuel price increases have
mostly been reversed over 4-6 quarters historically (2011, 2014, 2019); and 3. price
increases are usually more durable and sustainable. Sharp price increase of
~Rs40/bag in Apr’22 to mitigate cost escalations cannot be negated, in our view.
 Stocks are now pricing no / low EBITDA growth over FY23-24E vs 10% EBITDA
CAGR over past decade: While rising input costs pose downside risks to our /
consensus earnings, risk-reward is turning favourable (post up to ~25% stock price
correction over the past four months), in our view.
 Mar’22 volumes likely improving; Q4FY22 may see lower 1-2% YoY decline vs 4-
5% decline expected earlier. Except East, all other regions are likely to see YoY growth
in Mar’22. South is likely to post low double-digit YoY growth in Q4FY22. Hence,
Q4FY22 industry volumes may see marginal fall YoY (vs 4% YoY decline seen during
Q3FY22) and may grow 17-18% QoQ (vs historical average of 12-13% QoQ).
Valuation summary
TP P/E (x) EV/EBITDA (x) EV/t (USD/t)
Company Rating (Rs/sh) FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E
UTCEM BUY 9,080 31.3 23.2 18.8 16.0 12.4 10.2 196 172 161
SRCM BUY 29,700 35.2 29.5 24.6 19.3 15.6 12.9 205 197 180
Research Analyst: ACEM*^ BUY 424 21.1 21.5 17.3 11.0 10.6 8.6 138 133 125
ACC* BUY 2,710 20.2 20.1 16.8 10.9 10.4 8.4 126 120 112
Krupal Maniar, CFA DALBHARA ADD 2,025 41.8 30.5 24.6 12.0 10.4 9.3 102 104 89
[Link]@[Link] NUVOCO BUY 590 120.8 35.2 19.1 12.0 9.7 7.9 105 105 98
+91 22 6807 7254 TRCL BUY 1,035 25.4 19.4 16.0 15.0 11.7 9.8 145 141 130
JKCE BUY 3,935 27.0 19.8 16.1 13.6 10.9 9.0 172 138 132
ICEM SELL 157 55.0 27.2 16.9 16.0 12.6 9.6 79 78 75
JKLC BUY 700 11.5 9.7 8.4 6.8 5.9 5.3 65 64 64
ORCMNT ADD 191 10.3 8.8 7.9 5.1 4.5 4.7 50 49 55
PRSMJ ADD 151 39.8 18.9 14.4 10.5 7.9 6.5 100 71 53
HEIM ADD 228 20.0 15.5 12.0 9.4 7.5 5.7 83 78 72
GRASIM ADD 1,732 16.4 13.9 9.6 9.4 7.7 6.6 - - -
Source: I-Sec research *Dec year-ending, ^on a consolidated basis
Please refer to important disclosures at the end of this report
Cement, March 23, 2022 ICICI Securities
 Q4FY22 average pan-India prices likely up 1-2% QoQ and 5% YoY but unlikely
to offset cost escalations YoY. Prices in North, Central and West regions (which
did not see any meaningful price hikes in Jan-Feb’22) have been hiked by Rs10-
12/bag MoM in Mar’22; while other regions are holding onto price hikes
implemented in Jan-Feb’22. While average pan-India prices are likely up by
Rs25/bag from the exit of Dec’22, they are broadly flat QoQ across most regions
except East, owing to 2-3% QoQ price increase seen during Q3FY22. East region,
which declined 4-5% QoQ in Q3FY22, has seen similar reversal (up 4% QoQ) in
Q4FY22. On a YoY basis, average pan-India and most regions prices are up 5%
with North, Central and East regions being up 4-5%, West up 8% and South flat
during Q4FY22.
 Q4FY22 average EBITDA/te may inch up by Rs100/te QoQ; although likely to
be down by Rs150/te. We expect minimal QoQ increase in power and fuel
costs/te in Q4FY22 owing to lower fuel prices in Nov-Dec’21. Even average diesel
prices are down 2-3% QoQ in Q4FY22. Besides, 17-18% QoQ volume increase
would provide operating leverage on a QoQ basis. Hence, margins (EBITDA/te)
may bottom out in Q3FY22, in our view. However, on a YoY basis, fuel price
increases would still be substantial and unlikely to be offset by price hikes in
Q4FY22. Overall, there seems no major change in our expectations for Q4FY22E
earnings.

2
Cement, March 23, 2022 ICICI Securities

Key tables and charts

Demand has grown at ~6% CAGR over past 10 Increasing industry consolidation to aid firm
years; similar trend expected pricing

Cement Demand (mnte) % YoY RHS

500 11.8 14.0

450 10.6 12.0
400 8.3 8.8 8.7
7.9 10.0
350 7.0 6.8 6.5 8.9 8.0
300 5.5 5.2
6.0
250 2.9
2.1 4.0
200
150 2.0
100 -1.7 0.0
-2.5
50 -2.0
0 -4.0
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22E
FY23E
FY24E

Source: I-Sec research Source: I-Sec research

Average pan-India cement utilisation to increase Clinker utilisation to inch up to 80% in FY24E
300bps over FY22E-FY24E
Utilisations (%) FY20 FY21 FY22E FY23E FY24E FY21 FY22E FY23E FY24E
North, Central and East (combined)
North 78 84 82 86 85 Clinker capacity 165 169 176 197
Central 81 81 81 82 78 Clinker utilisation* 87 83 86 83
South and West (combined)
East 82 88 74 76 77
Clinker capacity 169 175 178 178
West 74 71 72 69 71 Clinker utilisation* 63 66 71 76
All-India
South 60 52 56 61 65
Clinker capacity 334 345 354 375
All-India 72 73 71 73 74 Clinker utilisation* 77 74 79 80
Source: I-Sec research Source: I-Sec research, *based on effective capacity operational

Average pan-India prices were up 5% YoY in UTCEM- EV/E – in-line with historical average
Mar’22
FY18 FY19 FY20 FY21 FY22 EV/EBITDA (x) Mean
+1 Std. Dev -1 Std. Dev
390 24.0

370 21.0
18.0
350 15.0
(Rs/bag)

12.0
330
9.0
310 6.0
3.0
290
-
Feb-12

Feb-13

Feb-14

Feb-15

Feb-16

Feb-17

Feb-18

Feb-19

Feb-20

Feb-21

Feb-22
Aug-12

Aug-13

Aug-14

Aug-15

Aug-16

Aug-17

Aug-18

Aug-19

Aug-20

Aug-21

270
Nov

Dec
Oct
May

Mar
Aug

Sep
Apr

Jun

Jan
Jul

Feb

Source: Industry data, I-Sec research Source: Bloomberg, I-Sec research

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 Cement, March 23, 2022 ICICI Securities

Pace of capacity additions to depend on demand

recovery
While >80mnte capacities are planned to be added over FY22-24E, there is usual
delay of 6-12 months in commissioning which would also depend on the pace of
demand recovery. Nearly 60% of these capacities are planned to be added in high-
growth markets of East and Central regions. North is likely to operate at ~85%
utilisation, Central / East regions may operate at 77-82%, West at ~70% and South is
likely to operate at <65% utilisation over FY22-24E.

Table 1: North – capacity additions may inch up in Table 2: East – more capacities expected in
FY24E anticipation of high growth
(in mnte) (in mnte)
Company CoD FY20 FY21 FY22E FY23E FY24E Company CoD FY20 FY21 FY22E FY23E FY24E
ACEM Sep-21 1.8 ACC Apr-21 1.1
ACEM Apr-23 1.5 JKLC Sep-19 0.8
JKCE Dec-19 2.0 JSW Sep-21 1.2
JKLC Sep-21 0.4 JSW Jun-19 1.2
SRCM Sep-23 3.0 JSW Mar-22 1.0
UTCEM Mar-23 2.5 DALBHARA Dec-20 3.1
Wonder Mar-21 2.0 DALBHARA Apr-21 2.3
Wonder Apr-23 2.5 DALBHARA Mar-24 5.0
Total 2.0 2.0 2.2 2.5 7.0 DALBHARA Sep-23 2.5
Source: I-Sec research NUVOCO Jun-21 1.5
STAR Dec-20 1.0
TRCL Sep-19 1.1
Table 3: Central – increase in capacity additions TRCL Sep-20 0.9
likely SGC Dec-21 1.5
(in mnte) SRCM Dec-20 1.8
Company CoD FY20 FY21 FY22E FY23E FY24E SRCM Jun-19 1.5
ACC Dec-22 2.6 SRCM Sep-23 2.0
ACC Dec-23 2.2 SRCM Sep-22 2.0
BCORP Sep-22 1.2 UTCEM Sep-21 0.6
HEIM Mar-20 0.9 UTCEM Sep-21 0.6
JKCE Feb-20 1.5 UTCEM Mar-23 6.8
JKCE Apr-23 3.5 UTCEM Apr-22 2.2
SGC Dec-21 1.0 Total 4.6 6.8 9.8 11.0 9.5
UTCEM Mar-20 2.0
UTCEM Mar-22 3.3
UTCEM Mar-23 1.8
Prism Sep-22 0.9
Prism Sep-23 1.0
Wonder Feb-20 2.5
Total 6.9 - 4.3 6.5 6.7
Source: I-Sec research Source: I-Sec research

Table 4: West – to see entry of new players Table 5: South – few capacity additions expected
due to low utilisation
(in mnte) (in mnte)
Company CoD FY20 FY21 FY22E FY23E FY24E Company CoD FY20 FY21 FY22E FY23E FY24E
BCORP Mar-22 3.9 Chettinad Apr-20 2.5
CENT Apr-19 1.2 JSW Apr-23 1.2
JKCE Dec-20 0.7 DALBHARA Mar-24 3.9
JSW Sep-22 2.3 My Home Apr-23 2.0
DALBHARA Sep-21 3.0 Penna Sep-22 2.0
DALBHARA Mar-24 1.0 TRCL Jun-20 1.1
SNGI Dec-21 2.0 TRCL Mar-22 1.0
SRCM Dec-21 2.0 SGC Sep-19 0.5
UTCEM Mar-23 1.8 TANCEM Dec-19 1.0
Total 1.2 0.7 10.9 4.1 1.0 Total 1.5 3.6 1.0 2.0 7.1
Source: I-Sec research Source: I-Sec research

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 Cement, March 23, 2022 ICICI Securities
Table 6: Average pan-India cement utilisation to Table 7: Clinker utilisation to inch up to 80% in
increase 300bps over FY22E-FY24E FY24E
Utilisations (%) FY20 FY21 FY22E FY23E FY24E (in mnte) FY20 FY21 FY22E FY23E FY24E
North, Central and East (combined)
North 78 84 82 86 85 Clinker capacity 159 165 169 176 197
Central 81 81 81 82 78 Clinker utilisation* 83 87 83 86 83
South and West (combined)
East 82 88 74 76 77
Clinker capacity 163 169 175 178 178
West 74 71 72 69 71 Clinker utilisation* 70 63 66 71 76
All-India
South 60 52 56 61 65
Clinker capacity 322 334 345 354 375
All-India 72 73 71 73 74 Clinker utilisation* 77 77 74 79 80
Source: I-Sec research, based on effective capacity operational Source: I-Sec research, *based on effective capacity operational (%)

Average pan-India cement / clinker utilisation is likely to increase to 74% / 80%

by FY24E

Table 8: North – utilisation to reach 85% in FY24E Table 9: East – utilisation to remain >75% despite
higher capacity additions
(in mnte) FY20 FY21 FY22E FY23E FY24E (in mnte) FY20 FY21 FY22E FY23E FY24E
Installed capacity 105 107 109 112 119 Installed capacity 93 100 110 121 130
Effective capacity 101 99 108 109 117 Effective capacity 89 91 104 113 123
YoY chg (%) (2.3) (1.8) 9.3 1.0 7.3 YoY chg (%) 2.7 1.9 15.0 8.3 8.9
Volumes 78 83 89 94 100 Volumes 73 80 77 86 94
Utilisation (%) 78 84 82 86 85 Utilisation (%) 82 88 74 76 77
YoY change (%) 1.0 6.5 6.5 6.0 6.0 YoY change (%) 1.0 9.0 (3.3) 11.0 10.0

Table 10: Central – utilisation to remain ~80% Table 11: West – utilisation to remain rangebound
despite capacity additions over FY21-FY24E
(in mnte) FY20 FY21 FY22E FY23E FY24E (in mnte) FY20 FY21 FY22E FY23E FY24E
Installed capacity 65 65 69 75 82 Installed capacity 64 65 76 80 81
Effective capacity 57 61 65 71 80 Effective capacity 62 59 69 77 80
YoY chg (%) (0.9) 7.1 6.6 8.9 13.2 YoY chg (%) 4.0 (4.7) 15.9 11.7 3.8
Volumes 46 49 53 58 62 Volumes 46 42 49 53 57
Utilisation (%) 81 81 81 82 78 Utilisation (%) 74 71 72 69 71
YoY change (%) 0.4 7.3 6.8 9.7 8.0 YoY change (%) (2.0) (8.0) 17.0 8.0 6.0

Table 12: South – utilisation to reach 65% by Table 13: Pan-India utilisation to reach ~74% by
FY24E FY24E
(in mnte) FY20 FY21 FY22E FY23E FY24E (in mnte) FY20 FY21 FY22E FY23E FY24E
Installed capacity 171 175 176 178 185 Installed capacity 498 511 539 565 597
Effective capacity 166 160 175 177 181 Effective capacity 474 470 521 546 581
YoY chg (%) 0.5 (3.3) 9.3 1.1 2.4 YoY chg (%) 0.6 (1.0) 10.9 4.9 6.3
Volumes 99 83 99 109 118 Volumes 343 337 367 399 431
Utilisation (%) 60 52 56 61 65 Utilisation (%) 72 72 70 73 74
YoY change (%) (9.0) (16.5) 19.0 10.0 9.0 YoY change (%) (2.6) (1.5) 8.6 8.9 8.0
Source: Industry data, I-Sec research

5
Cement, March 23, 2022 ICICI Securities

Industry consolidation to increase further; top 6 companies

ex-South to have 75-85% capacity share by FY23E
Industry consolidation to increase further with share of top six companies to rise
from 49% to 54% by FY23E as 70% of new capacity additions are planned by these
companies. Similarly, the share of top six companies in the respective regions ex-
South would increase from the current 67-80% to 75-85% by FY23E.

Table 14: Capacity share of top 6 companies in FY19

North East Central West South India
Comp. Share Comp. Share Comp. Share Comp. Share Comp. Share Comp. Share
UTCEM 24 DALBHARA 17 UTCEM 30 UTCEM 33 UTCEM 12 UTCEM 20
SRCM 23 UTCEM 13 BCORP 15 ACEM 17 TRCL 9 SRCM 8
ACEM 9 NUVOCO 10 PRSMJ 12 ACC 8 ICEM 8 ACC 7
JKCE 7 SRCM 10 ACC 9 CENT 7 DALBHARA 7 ACEM 6
JKLC 7 ACC 10 HEIM 8 SNGI 6 Chettinad 6 DALBHARA 6
Wonder 6 ACEM 9 JPA 8 Murli 4 ACC 6 3
Total 76 Total 67 Total 81 Total 76 Total 48 Total 49
Source: I-Sec research

Table 15: High consolidation – capacity share of top 6 companies in FY23E

North East Central West South India
Comp. Share Comp. Share Comp. Share Comp. Share Comp. Share Comp. Share
UTCEM 24 UTCEM 21 UTCEM 37 UTCEM 37 UTCEM 11 UTCEM 23
SRCM 23 DALBHARA 17 BCORP 13 ACEM 14 TRCL 10 SRCM 9
ACEM 10 Nuvoco 14 ACC 12 SNGI 8 Chettinad 8 ACC 7
JKCE 8 SRCM 14 PRSMJ 9 ACC 6 ICEM 7 DALBHARA 6
JKLC 7 ACC 8 HEIM 7 JSW 6 DALBHARA 7 ACEM 5
Wonder 7 ACEM 6 JPA 7 BCORP 6 Penna 6 TRCL 4
Total 78 Total 80 Total 85 Total 77 Total 49 Total 54
Source: I-Sec research

Table 16: M&A deals augmenting higher consolidation in the industry

Capacity EV
Month Buyer Seller (mnte) (US$mn) EV/te Remarks
Jul-13 ACEM HolcimIndia 30.7 2,500 110 Bought 50.04% stake in ACC
Sep-13 UTCEM JPA 4.8 600 125 Gujarat assets of JPA, EV/EBITDA of 11x
Mar-14 DALBHARA JPA 2.1 180 90 Grinding unit with a 30-year clinker / slag supply agreement
Aug-14 SRCM JPA 1.5 60 40 Grinding unit only in Haryana
Sep-14 SGC BMM 1 90 90 Int. plant in AP with 25MW capacity, 155mnte of limestone reserve
DALBHARA increases its stake from 48.23% to 74.93%,
Feb-15 DALBHARA OCL India 6.7 174 110
consolidating OCL India
Reliance
Feb-16 BCORP 5.5 720 130 One integrated plant and two grinding units
Cement
Feb-16 UTCEM JPA 21.2 2,400 113 Assets spread across Central, North and South regions
Jul-16 Nirma Lafarge 11 1,284 117 Assets spread across East and North regions
Jul-18 DALBHARA Kalyanpur 1.1 51 50 DALBHARA expected to commence operations from Oct’18
Century Includes 2mnte grinding unit. UTCEM received CCI approval in
May-18 UTCEM 13.4 1,268 96
Textiles Aug’18
4.6mnte clinker and 6.25mnte cement; potential expansion
Nov-18 UTCEM Binani Cement 8.3 1,130 140
opportunity of 5mnte.
Jul-19 DALBHARA Murli 3 110 38 Capex of US$60mn required to make the plant operational
Feb-20 Nuvoco Emami 8.3 735 112 It operates an integrated cement plant and three grinding units
Source: I-Sec research

6
Cement, March 23, 2022 ICICI Securities

Input costs still remain high

Input costs continue to rise – pose downside risk to our / consensus FY22-24E
earnings. Imported coal / petcoke prices are up 40% from the exit of Dec’21 owing to
current global geo-political tension, while domestic petcoke prices also increased by
~24% MoM in Mar’22. Crude prices are up >30% during Jan-Mar’22; hence, diesel
prices may move upwards from mid-Mar’22 post state elections. Accordingly, variable
costs are expected to remain elevated in H1CY22 and may pose downside risks to
our / consensus FY22-24E earnings in the absence of cumulative Rs50-60/bag price
increase during H1CY22. In the past three years, industry has taken average
Rs40/bag price hike in the first half of each year.

Chart 1: Domestic petcoke prices up 24% MoM in Chart 2: Diesel prices (Mumbai) were flat MoM in
Mar’22 Jan’22 and Feb’22 due to ongoing state elections
Rs/ltr

Dom estic petcoke prices Delhi Kolkata Mumbai Chennai

110.0
25,000
100.0
20,000
90.0
15,000
(Rs/te)

80.0
10,000
70.0

5,000 60.0

- 50.0
Jun-19

Jun-20

Jun-21

May-17

May-18

May-19

May-20

May-21
Mar-19

Mar-20

Mar-21

Mar-22

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22
Mar-17

Mar-18

Mar-19

Mar-20

Mar-21
Jul-17

Jul-18

Jul-19

Jul-20

Jul-21
Dec-19

Dec-20

Dec-21
Sep-19

Sep-20

Sep-21

Nov-16

Nov-17

Nov-18

Nov-19

Nov-20

Nov-21
Sep-17

Sep-18

Sep-19

Sep-20

Sep-21
Source: Industry data, I-Sec research Source: Bloomberg, I-Sec research

Chart 3: International coal prices up ~40% from Chart 4: Coal India e-auction prices increased
the exit of Dec’21 33% YoY in Q3FY22
Im ported coal prices E-auction prices
250.0 3,000

200.0 2,500

2,000
150.0
(US$/te)

(Rs/te)

1,500
100.0
1,000
50.0 500

0.0 -
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19

Q1FY20
Q2FY20
Q3FY20
Q4FY20
Q1FY21
Q2FY21
Q3FY21
Q4FY21
Q1FY22
Q2FY22
Q4FY19

Q3FY22
May-18

May-19

May-20

May-21
Feb-18

Feb-19

Feb-20

Feb-21

Feb-22
Nov-17

Nov-18

Nov-19

Nov-20

Nov-21
Aug-18

Aug-19

Aug-20

Aug-21

Source: Bloomberg, I-Sec research Source: Industry data, I-Sec research

7
Cement, March 23, 2022 ICICI Securities
Chart 5: North region prices up 5% YoY in Mar’22 Chart 6: Central region prices up 5% YoY in
Mar’22
FY18 FY19 FY20 FY21 FY22
FY18 FY19 FY20 FY21 FY22
380
380
360
360
340
340
(Rs/bag)

(Rs/bag)
320
320
300
300
280
260 280

240 260

220 240

Nov

Dec
Oct
May

Mar
Aug

Sep
Apr

Jun

Jan
Jul

Feb
Nov

Dec
Oct
May

Mar
Aug

Sep
Apr

Jun

Jan
Jul

Feb
Source: Industry data, I-Sec research Source: Industry data, I-Sec research

Chart 7: East region prices up 5% YoY in Mar’22 Chart 8: South region prices up 2% YoY in Mar’22
FY18 FY19 FY20 FY21 FY22
FY18 FY19 FY20 FY21 FY22
370
420
360
350 400
340 380
(Rs/bag)

(Rs/bag)

330 360
320
340
310
300 320

290 300
280 280
270
260
Nov

Dec
Oct
May

Mar
Aug

Sep
Apr

Jun

Jan
Jul

Feb

Nov

Dec
Oct
May

Mar
Aug

Sep
Apr

Jun

Jan
Jul

Feb
Source: Industry data, I-Sec research Source: Industry data, I-Sec research

Chart 9: West region prices up 6% YoY in Mar’22 Chart 10: All-India prices up 5% YoY in Mar’22
FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22
390
380
370
360
(Rs/bag)

340 350
(Rs/bag)

320 330
300
310
280
290
260

240 270
Nov

Dec
Oct
May

Mar
Aug

Sep
Apr

Jun

Jan
Jul

Feb
Nov

Dec
Oct
May

Mar
Aug

Sep
Apr

Jun

Jan
Jul

Feb

Source: Industry data, I-Sec research Source: Industry data, I-Sec research

8
Cement, March 23, 2022 ICICI Securities
Table 17: Volume growth assumptions over FY20-FY24E
Total volumes (mnte) Growth YoY (%)
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E
UTCEM 82.3 86.2 93.7 104.5 115.6 (4.1) 4.7 8.7 11.5 10.6
ACC 29.8 26.2 29.4 30.9 33.5 3.2 (12.0) 12.3 5.0 8.5
ACEM 24.1 22.7 27.0 29.1 30.8 (0.8) (5.8) 19.1 7.9 5.9
SRCM 28.7 30.0 31.2 34.7 38.5 (0.0) 4.4 3.8 11.3 11.0
DALBHARA 19.3 20.7 22.4 25.0 27.5 3.3 7.2 8.5 11.5 10.0
NUVOCO 12.2 16.0 17.8 20.2 22.0 (2.5) 30.5 11.5 13.5 8.9
ICEM 11.0 8.9 9.2 10.3 11.1 (11.4) (19.2) 3.0 12.0 8.0
JKCE 10.2 11.9 13.9 15.1 17.3 0.2 16.7 15.9 9.0 14.9
TRCL 11.2 10.0 11.6 13.4 15.0 0.7 (10.9) 16.0 16.0 12.0
JKLC 10.0 10.5 11.0 11.5 12.1 (9.8) 4.0 4.8 5.4 5.0
ORCMNT 5.8 5.1 5.6 6.2 6.7 (9.5) (13.0) 10.0 12.0 8.0
PRSMJ 5.7 5.8 5.5 6.1 6.5 (8.7) 1.7 (6.0) 11.0 7.0
HEIM 4.7 4.5 4.8 5.1 5.4 (3.9) (4.7) 7.5 5.5 6.0
Total 255.2 258.4 282.9 312.1 342.2 (2.4) 1.3 9.5 10.3 9.6
Source: Company data, I-Sec research

Table 18: Realisation growth assumptions over FY20-FY24E

Realisation (Rs/te) Growth YoY (%)
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E
UTCEM- blended 5,038 5,127 5,494 5,645 5,754 5.7 1.8 7.2 2.8 1.9
ACC - blended 5,157 5,151 5,378 5,672 5,771 2.7 (0.1) 4.4 5.5 1.7
ACC - grey cement 4,723 4,834 5,024 5,299 5,405 1.8 2.3 3.9 5.5 2.0
ACEM 4,717 4,930 5,109 5,340 5,475 4.2 4.5 3.6 4.5 2.5
SRCM 4,299 4,432 4,849 4,984 5,105 5.2 3.1 9.4 2.8 2.4
DALBHARA - cement 4,691 4,879 4,996 5,086 5,162 (1.1) 4.0 2.4 1.8 1.5
NUVOCO 4,559 4,323 4,761 4,969 5,073 1.4 7.5 3.5 3.0 2.0
ICEM 4,668 5,018 5,194 5,349 5,456 10.5 (2.7) 3.8 5.5 1.4
JKCE- blended 5,603 5,449 5,656 5,966 6,046 3.8 9.8 2.5 1.6 1.6
TRCL 4,736 5,199 5,329 5,414 5,501 12.1 4.2 8.6 2.2 2.3
JKLC 4,342 4,523 4,914 5,020 5,137 6.2 10.4 9.0 1.3 1.2
ORCMNT 4,167 4,602 5,016 5,082 5,143 2.1 (1.6) 3.0 3.6 1.8
PRSMJ 4,516 4,443 4,576 4,741 4,828 6.5 1.7 1.5 5.2 2.0
HEIM 4,586 4,665 4,735 4,981 5,081 1.4 (5.2) 10.1 4.4 2.1
Weighted average 4,815 4,918 5,217 5,390 5,498 4.6 2.1 6.1 3.3 2.0
Source: Company data, I-Sec research

Table 19: EBITDA/te growth assumptions over FY20-FY24E

EBITDA/te* (Rs) Growth YoY (%)
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E
UTCEM- consol. 1,128 1,341 1,268 1,378 1,449 31.8 19.0 (5.5) 8.7 5.1
ACC 811 949 1,020 1,008 1,112 10.4 17.0 7.5 (1.1) 10.3
ACEM 893 1,168 1,188 1,125 1,295 14.5 30.8 1.8 (5.3) 15.1
SRCM 1,286 1,347 1,274 1,360 1,434 36.2 4.7 (5.4) 6.8 5.5
DALBHARA 1,092 1,346 1,048 1,107 1,170 4.5 23.3 (22.1) 5.7 5.6
NUVOCO 1,060 915 886 961 1,077 44.9 (13.7) (3.1) 8.5 12.0
ICEM 530 902 607 682 805 10.2 70.1 (32.7) 12.3 18.1
JKCE 1,186 1,320 1,123 1,286 1,309 45.2 11.4 (14.9) 14.5 1.8
TRCL 991 1,529 1,201 1,285 1,330 7.6 54.3 (21.4) 7.0 3.5
JKLC 794 898 832 902 958 95.1 13.1 (7.4) 8.4 6.3
ORCMNT 659 1,090 1,131 1,121 1,121 35.5 65.4 3.7 (0.9) (0.0)
PRSMJ 889 963 817 894 959 6.6 8.2 (15.1) 9.3 7.3
HEIM 1,122 1,129 890 1,012 1,138 13.7 0.7 (21.2) 13.7 12.5
Weighted average 1,022 1,217 1,128 1,198 1,283 26.2 19.1 (7.4) 6.2 7.1
Source: Company data, I-Sec research; *including other operating income

9
Cement, March 23, 2022 ICICI Securities
Price charts
ACC Ambuja Cement Dalmia Bharat Grasim
2,800 475 2,800 2,500
425
2,300 2,000
2,300 375
325 1,800 1,500

(Rs)

(Rs)
(Rs)

1,800 275

(Rs)
1,300 1,000
225
1,300 175 800 500
125 300 0
800

Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21

Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21
Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21
Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21

India Cement JK Cement JK Lakshmi Cement Orient Cement

280 4,000 850 220
3,500 750
240 180
3,000 650
200 2,500 550 140
(Rs)

(Rs)
160 2,000
(Rs)

(Rs)
450 100
1,500
120
1,000 350
80 60
500 250
40 0 150 20
Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21
Mar-19

Mar-20

Mar-21

Mar-22

Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21
Sep-19

Sep-20

Sep-21

Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21
Prism Johnson Ramco Cements UltraTech Cement Shree Cement
180 1,200 9,000 35,000
160 1,100 8,000 32,000
140 29,000
1,000 7,000
120 26,000
100 900 6,000
(Rs)

(Rs)
23,000
(Rs)

800
(Rs)

80 5,000
60 700 20,000
4,000 17,000
40 600
20 500 3,000 14,000
0 400 2,000 11,000
Mar-19

Mar-20

Mar-21

Mar-22

Mar-19

Mar-20

Mar-21

Mar-22

Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21

Sep-19

Sep-20

Sep-21

Sep-19

Sep-20

Sep-21
Mar-19

Mar-20

Mar-21

Mar-22
Sep-19

Sep-20

Sep-21

HeidelbergCement Nuvoco Vistas Corporation

300 600
550
250
500
200 450
(Rs)

(Rs)

400
150 350
300
100
250
50 200
Jan-22
Mar-19

Mar-20

Mar-21

Mar-22

Mar-22
Oct-21
Nov-21
Dec-21
Sep-19

Sep-20

Sep-21

Aug-21

Source: Bloomberg

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 Cement, March 23, 2022 ICICI Securities

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