In
FY20, key watchable points for the cement sector would be crude oil prices, pet
coke prices and demand growth in Q2FY20
Healthy volume and value growth during the last year
proved to be a win-win situation for the cement sector. Volume growth was around
12 percent, above expectations led by a sharp increase in infra,
housing and affordable housing spend.
In FY20, we expect it to
further grow 5-6 percent, which is quite decent due to a higher base. However,
it should be noted that incremental capacity would be around 18-20 MTPA, while
incremental production would be higher by 24-25 MTPA, providing pricing power
and stability to companies.
Last year, the capacity
utilisation for the sector was presumed in the range of 68-69 percent but
actullay it came at 71 percent which, we expect to reach 72-73 percent in FY20
due to incremental demand and production.
Low raw material cost for the sector increased the bottomline
during Q4FY19. Softening of pet coke prices to $96/tonne during February 2019,
easing crude prices and freight expenses have helped companies to increase
realisations and deliver higher margins.
In FY20, key watchable points
for the sector would be crude oil prices, pet coke prices and demand growth in
Q2FY20. A number of developmental projects and demand from the housing sector
will also be in focus.
Pharma sector to excel after dwindling for years
Pricing pressure from
the US has toned down and the channel consolidation has already formed a new
normal. Companies into specialty drugs, injectables and biosimilars are
expected to benefit in the long run after dwindling for years.
Though increase in
R&D spends by various private players has driven sector growth to 10
percent as on February 19, but we expect this to cool down to 8-9 percent
for the next two years.
We expect China to be
the next likely hub for India’s exports as it holds huge potential and the
government is keen to increase exports there. In addition, regular acquisitions
and diversification by companies mainly in Europe and Japan (being the second largest
regulated market) is expected to not only increase their footprint but also
reduce the dependence on the US market.
Even in India, this
sector is expected to pick up pace. Medicine spending is projected to grow 9-12
percent over the next five years. Moreover, government push towards this sector
in terms of introducing various generic drugs, rising awareness for health,
launch of Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana Kendra (PMBJPK) and
pharma vision 2020 would improve growth.
Currency fluctuations,
various regulatory approvals, sustained retention in client growth will remain
the key risks.
Source: https://www. moneycontrol.com/news/business/markets/pharma-sector-to-excel-volume-and-value-growth-create-win-win-situation-for-cement-cos-3904941.html
Financial
Advisory Company in Indore, Stock
Advisory Company in Indore, Equity Tips, FreeTrading Tips , MCX Tips, sebi registered advisory company, Intraday
stock tips, Free
commodity tips
0 comments:
Post a Comment