Cement is one of the core raw materials in any civil construction. The sector structurally offers a 6-7% volume growth as India upgrades its infra & housing, but the volatility in its operating profitability (EBIDTA/ton) creates cyclicality (and an opportunity for returns!). We cover the sector in depth, along with what is the key metric to track, that drives stock prices.
Watch this video if you want to understand -
• Cement Industry Analysis covering both basics and details of sector (from Indian Stock Market perspective)
• Overview of key demand drivers and cement manufacturing process
• Regional demand-supply dynamics of cement - North, South, West, East and Central
• Key variable to analyze cement company's expansion plans (project IRR)
• Deep dive into the most important metric, "EBIDTA per ton" - understanding its sensitivity to variables like petcoke prices, power cost, lead distance, green energy usage mix, etc.
• Evolution and analysis of Ultratech Cement, Shree Cement, Ambuja Cement, ACC, impact of Adani buying Holcim's stake in ACC and Ambuja
• Understanding what are those 2 metric to track, which drives cement stock prices.
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Chapters -
0:00 Introduction & Index
2:43 Overview of demand drivers
5:50 Manufacturing process, types of cement
12:32 Regional demand supply dynamics
28:00 Key variables of cement plant's IRR
33:16 Unit economics of production, EBIDTA per ton sensitivity
57:29 Snapshot of 10 listed players in India
01:01:48 Evolution of Ultratech Cement
01:07:00 Evolution of Shree Cement
01:10:50 Evolution of ACC-Ambuja
01:13:28 Adani entering the game!
01:18:53 Ultratech vs Shree vs ACC-Ambuja
01:24:12 Ground Rules for Investing in sector, what drives stocks
Feel free to reach me on email (harshittoshniwal@bottomsupresearch.com) for constructive discussion on India stock markets.
Disclaimer: Content for educational purpose ONLY. Do consult your advisor before acting on any view.
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