Cement sector's topline likely to grow 8.1% y-o-y: Angel Broking

However, net profit to fall 12.8%, says the broking firm

India's cement sector is likely to see an 8.1% improvement (year-on-year) in its topline, says a report from Angel Broking.

According to its fourth quarter review report, dated 3 April, the growth in topline will be driven mostly by higher realisation.

South-based Madras Cement is expected to post the highest topline growth of 19.1%, aided by healthy demand scenario in the state of Tamil Nadu and strong pricing environment, added the report.

Despite better y-o-y realisation, the broking firm expects most of the cement companies under its coverage to face margin pressure on account of higher operating costs. This will put pressure on cement makers' net profit, which is expected to fall by 12.8%, it said.

According to the report, North-based JK Lakshmi Cement is likely to take the worst fall in its net profitability. It could decline by 43.1% while those of Ambuja, UltraTech and ACC are likely to drop by 24.7%, 15.7% and 13.2%, respectively.

The house continues to remain 'neutral' on the cement sector but has given a buy call on ACC and JK Lakshmi Cement due to their cheap valuations.