For cement companies, the sluggish demand has impacted pricing in the past quarter and that is why on the sequential basis we are likely to see that profitability could get a bit of a dent.

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Cement prices rose across India on a year-on-year (YoY) basis, though on a sequential basis they are down by roughly around 4 percent, which will have its impact on the margin. The EBITDA per tonne will look very good on YoY basis. On a sequential basis, we are likely to see a bit of a cut.

The Street is expecting margins to decline on a quarter-on-quarter (QoQ) basis because volumes are muted, input costs really have not fallen as much and the pricing has been rather weak.

Navin R Sahadeo of Edelweiss said, “First half demand has been a bit slow, but so far so good, I wouldn’t read too much negative into it in the sense that first quarter was extremely strong and second quarter because of very extremely heavy rains has been a bit of a washout."

Volumes are flattish, but from November onwards it is fair to assume a recovery in volumes, he said. "Cost has been extremely kind, so I am pretty hopeful that the second half will see strong numbers with the expected recovery in volumes.”

He said Q2 earnings will be a bit of mixed bag, with Ultratech Cement and Shree Cement witnessing strong numbers. "I am not very hopeful on ACC and Ambuja Cements both as a pack because volumes also have been disappointing for these companies and so have the cost in the past two quarters," said Sahadeo.

"My estimates per se are a bit of negative growth for ACC which reports its numbers today. But like I said Ultratech Cement over 30 percent, even Shree Cement for that matter almost 23 percent kind of an EBITDA growth I am expecting.”