Calcutta, May 1: Cement companies could see improved earnings in the coming quarters driven by growing demand and better realisations on account of higher prices.

Most manufacturers have registered a growth in volume in the quarter ended March 31, 2016 on account of a pickup in demand particularly from the infrastructure sector. However, there was an impact on revenue as average realisation was lower by 2-3 per cent during the quarter despite higher volume.

While Ultratech registered a growth of 10 per cent in net profit during the quarter, ACC and Ambuja Cements' bottomline was down by 4 per cent for each over the corresponding year ago period.

"For ACC, realisation was under pressure declining by 8 per cent year on year and 3.7 per cent quarter on quarter and hence revenue growth was lower despite the strong volume growth by the company," said Siddharth Purohit, senior equity research analyst, cement, Angel Broking. "For Ultratech, volume growth at 15 per cent is ahead of our estimates. However, realisation has dropped higher than expected and hence revenue growth stood at 5 per cent despite strong volume growth," he added.

"While Ambuja has seen volume recovery in January-March, sustainability is the key. We expect the company to benefit from a strong pricing environment in the northern region and likely show healthy year on year growth over the coming quarters," said Mihir Jhaveri of Religare India.

According to market analysts, prices started falling at the beginning of the quarter in key markets across the country. A report from Emkay Research showed that prices were down Rs 5-15 per bag at the start of the quarter. But, there was surge towards the end of the quarter, particularly in the northern markets of Delhi, Gurgaon, Chandigarh, Jaipur and Ludhiana. Prices in the eastern region were steady for most part of the quarter with increasing trend towards the end of the period. In Calcutta, the average prices remained at around Rs 300 per bag.

"Though cement prices started picking up towards the end of the quarter, the real impact will only be visible in the coming quarters and we believe earnings (of cement firms) could further improve in 2016-17," said Purohit.