Cement valuations

Cement Valuation Range for top end companies

The EV/Capacity chart is a bit of a novelty. Leading companies are quoting at $150/ton or above. Cement growth continues to be strong, so valuations may not plummet to low end of the range. However, more downside than upside risk clearly

A look at Cement

Cement Sector Wide Capacity Utilisation

Was checking some cement data. The industry is headed for its worst phase since 2002. Capacity utilisations could fall 77% or so, and stay low over FY11 and FY12.  Every single cement company is hiking capacity by say 50% between FY10 and FY12. About 40mn ton capacity is reportedly gone on stream in FY10, about half of it in Q4 FY10.

FY10 was still a good year, profits jumped, since much of capacity adds were backended. FY11 and FY12 could see margins drop. How much? Some historical data..

Cement EBITDA margins