Weak demand, high cost to keep cement firms' EBITDA muted in Q2: Centrum

Q2FY22 is generally a weak quarter for cement makers due to monsoon, but the quarter under preview has also been affected by rising coal and pet coke prices and a transporters' strike

Drop in cement prices due to weak demand, coupled with input cost escalation, is expected to keep earnings before interest, tax, depreciation and amortisation (EBITDA) of the domestic cement industry muted for the September quarter, said brokerages.

Generally, July-September (Q2FY22) is a seasonally weak quarter for cement companies due to the monsoon, but the quarter under preview has been additionally affected by higher power and fuel cost as coal and pet coke prices surged dragging margins, said Centrum in its report.

Also, the erratic monsoon coupled with transporters’ strike hit the eastern region the most in Q2FY22 hurting volumes, it