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Volume growth for major branded building material categories is likely to accelerate QoQ in Q4 FY21 driven by-
1. impressive growth traction in secondary real estate market,
2. pent-up demand in renovation, refurbishment segment, and
3. sustained consolidation particularly in categories like plumbing pipes and laminates.
We thus foresee all categories to recover beyond pre-Covid-19 levels in Q4 FY21.
With expected increase in input costs (due to higher crude prices which were not passed on fully in Q4), we expect categories like tiles, pipes and adhesives to witness gross margin moderation on sequential basis.
However, Ebitda margins are likely to remain firm QoQ largely driven by operating leverage.
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