Top 5 cement makers adopt different strategies amid Q3 earnings slump

For the October-December 2024 period, analysts and industry executives estimated demand growth of 4-5 per cent at the industry level

The top five cement makers took a common hit on earnings in the third quarter (Q3) of 2024-25 (FY25). However, the volume trend for these five companies was a mixed bag, as each focused on different strategies.

 

For the October-December FY25 period, analysts and industry executives pegged demand growth of 4-5 per cent at the industry level. This growth, however, played out differently for each of the top five cement makers. UltraTech Cement, for instance, reported a 10 per cent rise in volumes from a year ago. Its closest competitor, Ambuja Cements, reported a 17 per cent growth in the same period.

 

The Q3 volume trend was starkly opposite for the third and fourth largest cement makers — Shree Cement and Dalmia Bharat, both of which reported a decline in volumes. Nuvoco Vistas surprised with a 16 per cent expansion in volumes, following a 7 per cent year-on-year (YoY) decline in the second quarter.

 

At play for these cement majors are different strategies. 

 

Analysts with Nuvama noted that Shree Cement has continued to prioritise realisations over volumes. Others at Nuvoco insist that the volume growth is not at the expense of realisation but focuses on key markets.

 

“We were able to get our volumes in Odisha, Chhattisgarh, Rajasthan, and Western Madhya Pradesh. These were the markets where we did quite well. There’s an internal programme we deployed, looking into markets in which we previously did not participate, and hence we participated,” said Jayakumar Krishnaswamy, managing director of Nuvoco, in an investor call.

 

Of the top two cement makers, Ambuja Cements’ volume growth was largely fuelled by its recent acquisitions. Analysts with Nuvama noted that, in the absence of the acquired assets, Ambuja’s volume growth would have been 7 per cent. On the other hand, the failure to complete the planned acquisition cost volumes for Dalmia Bharat. Company executives, in a call with analysts, noted, “During Q3, our volumes degrew by 2 per cent on a Y-o-Y basis, primarily because, in the same quarter last year, we had 370,000 tonnes of tolling volume from JP plants. Sales from Dalmia plants grew 3.7 per cent on a Y-o-Y basis in this quarter.”

 

Meanwhile, UltraTech, in its investor presentation, noted that focusing on building solution stores helped add more cement sales volumes in the quarter under review.