External broker reports(aggregated public sources), HDFC Securities

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Thematic (Sector/Industry)

<div><div><div><ul><li>High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.</li><li>Mixed realisation gains QoQ: While energy cost continues to rise QoQ, the industry could not fully pass on the inflation across all regions.</li><li>Cost inflation elevated: We estimate that overall fuel costs would soar 7/42% QoQ/YoY amid rising imported coal and pet coke prices.</li></ul><ul style="list-style-type: none;"><li> </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p></div></div></div>

High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.Mixed realisation gains QoQ: While energy cost continues to rise QoQ, the industry could not fully pass on the inflation across all regions.Cost inflation elevated: We estimate that overall fuel costs would soar 7/42% QoQ/YoY amid rising imported coal and pet coke prices. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement - Cost Inflation Continues, Margin Contracts

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

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<div><div><div><div><ul><li>Weak seasonal demand and decline in prices against the backdrop of high input costs would mean muted realizations</li><li>The trend in cement pricing has been discouraging so far.</li><li>The news regarding CCI’s investigation on cement companies might be a factor for subdued pricing.</li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Weak seasonal demand and decline in prices against the backdrop of high input costs would mean muted realizationsThe trend in cement pricing has been discouraging so far.The news regarding CCI’s investigation on cement companies might be a factor for subdued pricing.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement Sector - Elevated Energy Costs to Weigh on Margins

<div><div><div><div><ul><li>Summary of change in recommendation of our coverage universe: We have cut targets prices for our covered companies by 10-30% on account of reduced earnings expectations as well as lower target multiples.</li></ul><div><div><div><div><ul><li>Near term earnings outlook weak and positive triggers missing: We expect earnings to remain weak for the cement sector for the next two quarters on account of elevated costs and weak realizations amid a seasonally weak demand period.</li></ul><div><div><div><div><ul><li>Reversal in coal and crude prices can offer some solace: We believe that high competitive intensity will subside once the inflationary pressures recede and hence reversal of higher coal and crude prices is important.</li></ul></div></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Summary of change in recommendation of our coverage universe: We have cut targets prices for our covered companies by 10-30% on account of reduced earnings expectations as well as lower target multiples.Near term earnings outlook weak and positive triggers missing: We expect earnings to remain weak for the cement sector for the next two quarters on account of elevated costs and weak realizations amid a seasonally weak demand period.Reversal in coal and crude prices can offer some solace: We believe that high competitive intensity will subside once the inflationary pressures recede and hence reversal of higher coal and crude prices is important.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement Sector - Headwinds Galore; Turning 'neutral' on the Sector

<div><div><div><div><ul><li>Deal contours in brief: Holcim, through an offshore entity, owns 63.11% stake in Ambuja, which in turn owns 50.05% stake in ACC.</li></ul><div><div><div><div><ul><li>Why is Holcim selling its assets in India?: Holcim group had earlier announced its “Strategy 2025”, wherein it had outlined its focus on increasing its share of revenue from the ‘solutions &amp; products’ business.</li></ul><div><div><div><div><ul><li>How Adani pipped other bidders: Given the strong brands, pan-India network and large capacities, ACC- Ambuja assets were sought by multiple stakeholders.</li></ul></div></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Deal contours in brief: Holcim, through an offshore entity, owns 63.11% stake in Ambuja, which in turn owns 50.05% stake in ACC.Why is Holcim selling its assets in India?: Holcim group had earlier announced its “Strategy 2025”, wherein it had outlined its focus on increasing its share of revenue from the ‘solutions &amp; products’ business.How Adani pipped other bidders: Given the strong brands, pan-India network and large capacities, ACC- Ambuja assets were sought by multiple stakeholders.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement Sector - Landmark Deal – New Chapter Unfolds in Cement Industry

<ul><li>Media reports are ablaze with talks of a potential exit by Holcim from Indian markets</li><li>Neither Holcim nor its Indian subsidiaries Ambuja and ACC have offered any comments on the same so far</li><li>Our analysis suggests India remains a major market for Holcim and its Indian cement operations lead, with a lower carbon footprint</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Media reports are ablaze with talks of a potential exit by Holcim from Indian marketsNeither Holcim nor its Indian subsidiaries Ambuja and ACC have offered any comments on the same so farOur analysis suggests India remains a major market for Holcim and its Indian cement operations lead, with a lower carbon footprintContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement (Update): Is Holcim’s green focus reason for its India-exit stories?

India

Ambuja Cements Limited is an Indian cement producing company that manufactures and markets cement, clinker, and related products for domestic and export markets. Its product portfolio includes ordinary portland cement, portland pozzolana cement, and ready-mix concrete. The company is headquartered in Mumbai, Maharashtra, India, and was founded in 1983.

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Ambuja Cements (ACEM IN)

Cement - Cost Inflation Continues, Margin Contracts

High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.

HDFC Securities

Cement Sector - Elevated Energy Costs to Weigh on Margins

1QFY23 earnings for the cement sector will be muted as we expect margin pressure to continue in the near term due to higher operating costs,...

Nirmal Bang

Cement Sector - Headwinds Galore; Turning 'neutral' on the Sector

We are turning ‘neutral’ on the cement sector as we believe that there are multiple headwinds, which will inhibit earnings growth and in turn lead...

Nirmal Bang

Cement Sector - Landmark Deal – New Chapter Unfolds in Cement Industry

Adani group has sealed the deal to acquire Ambuja and ACC from Holcim in one of the biggest M&A deals in the Indian cement industry.

Nirmal Bang

Cement (Update): Is Holcim’s green focus reason for its India-exit stories?

Media reports are ablaze with talks of a potential exit by Holcim from Indian marketsNeither Holcim nor its Indian subsidiaries Ambuja and ACC...

HDFC Securities

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