Indian building material cos likely to have "tepid qtr" -ICICI

Somany Ceramics

06/01/2023 07:27

** Indian building material cos are expected to report a
tepid Q3, with both revenue and EBIDTA being subdued across
segments, says ICICI Securities
    ** Brokerage expects volume growth across construction
sectors (excl, pipe segment) to be tepid YoY/QoQ due to soft
demand as inflationary pressures remain high
    ** Sees margins for pipe cos to rise sequentially due to
stabilization of polyvinyl chloride prices and operating
leverage resulting from dealer restocking
    ** ICICI expects tile companies Kajaria Ceramics  KAJR.NS 
and Somany Ceramics  SOCE.NS  to see improved operating margins
QoQ (by 191-110 bps), led by easing of gas costs
    ** Expects margins at firms dealing with medium density
fiberboard to stay under pressure due to higher raw material
cost and tepid volume growth on a significant pick-up in imports
    ** Meanwhile, HDFC says demand outlook for building material
cos is positive due to urbanisation, higher infrastructure
investment and rebound in housing/commercial real estate
 (Reporting by Meenakshi Maidas in Bengaluru)
 ((meenakshi.maidas@thomsonreuters.com;))