With strong, double digit year-on-year (Y-o-Y) in dispatches for three consecutive months (April, May and June 2009), the 224-million tonne Indian cement industry is expected to register about 20% growth in revenues for the first quarter ended June 30, 2009, say industry analysts.

According to Sharekhan in its recent report, ?The adjusted profit after tax of the companies is expected to increase by 8.7%, on the back of a strong volume growth and improved realisation.?

The industry is also expected to register 20% growth in volumes during the quarter. Much in tandem with the volume growth, cement prices also increased in April and May 2009. However, for June the cement prices showed a mixed trend with the prices remaining stable at some major cities, like Mumbai, Delhi and Kolkata. ?We expect Q1 to be a good quarter with Ebitda margins likely to expand 32-404 bps sequentially for our coverage universe (that include ACC Ltd. Ambuja Cement, UltraTech, Grasim Industries and India Cements among others),? said Edelweiss quaterly result preview.

The realisations for cement companies are expected to increase 1 – 8.8 % Q-o-Q and (1)- 9% Y-o-Y. Overall, healthy realisation gains (highest for Grasim, ACC, and Ambuja on account of higher exposure to North ) will offset lower volumes keeping revenues flat sequentially, the Edelweiss report said.

Better prices, high volumes, and decline in raw material prices, especially of imported coal, are expected to improve the margins on the operating front as well.

Meanwhile, Angel Broking in a report said during Q1, though the cement stocks moved up on an absolute basis, they underperformed the broader markets owing to the concern of oversupply and start of sluggish season.

However, the stocks later picked up due to rise in infrastructure activities and spending on rural development projects . Hike in the cement prices during the quarter further garnered interest in cement stocks.

Going ahead in FY10, there is expected to be pricing pressure with available capacity addition of about 37 million tonne. However, easing of input costs like imported coal prices, which is down by 65% from the peak would aid the cement companies to protect their margins amidst falling prices, said experts in their reports.