Systematic
Factors
Ø Increase in
prices of key raw material i.e. Limestone and gypsum.
Ø Increase in
domestic coal prices and non-availability of low cost linkage coal has
increased the power & fuel cost for cement manufacturers.
Ø The freight
costs have also increased due to increase in surcharge and cess by Indian
Railways in Oct 2011 and increase in freight rates for some commodities in Mar
2012.
Ø Hike in the
prices of diesel.
Ø Slowdown of
production of cement by 3.8% in July-August because of the arrival of monsoon.
Ø Rise in
inflation rate from 8.87 % in 2011 to 9.30 % in 2012 leads to increase in
prices of raw materials for cement industry.
Ø Less demand
in cement because of following factors.


Source (Annual reports of Ambuja, J K Lakshmi and
Chettinad Cements and http://icra.in/Files/ticker/Indian%20Cement%20Sector_Sept%202012.pdf )
Unsystematic
Factors
Ø A decline
in cement prices, against Ambuja’s Cement price estimates of a CAGR of 2.8%
over 2012–2014 could impact their net profit.
Ø Ambhuja
Cement is unable to deliver the estimated volume CAGR of 10% during 2012–14
Ø Chettinad
Cement board approved de-listing the company's shares from stock exchanges.
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