Cement prices in May stay firm despite Covid-19 disruptions
Cement

Cement prices in May stay firm despite Covid-19 disruptions

Cement prices have remained stable in May despite demand disruptions caused by Covid-19 lockdowns and restrictions.

This is because cement manufacturers continue to place a premium on price over volume growth.

In May, the all-India average cement price increased by 1.1% to Rs 356 per 50 kg bag. It was a tad lower by 1.3% compared to the previous year level.

Following firm prices and a gradual relaxation of lockdown across states, analysts are bullish on cement companies.

They believe that concentrating on prices rather than volume will result in stable or improved operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins before depreciation and amortisation.

According to an analyst, one of the main reasons why cement companies' earnings have recently been upgraded is their desire to protect pricing.

The analyst also said that while margins will improve in the second half of FY22, it will not be sufficient to offset rising raw material costs. As per the analyst, margins are expected to improve by 2-3% in FY23. EBITDA margins for large cement companies range from 13 to 27%.

Demand from construction activities in the infrastructure, rural, and urban housing segments will boost cement makers' topline and profits as lockdown restrictions are gradually lifted.

Image Source


Also read: Cement demand may surpass 340 mt in FY22: ICRA

Also read: Cement demand to sustain: India Ratings and Research

Cement prices have remained stable in May despite demand disruptions caused by Covid-19 lockdowns and restrictions. This is because cement manufacturers continue to place a premium on price over volume growth. In May, the all-India average cement price increased by 1.1% to Rs 356 per 50 kg bag. It was a tad lower by 1.3% compared to the previous year level. Following firm prices and a gradual relaxation of lockdown across states, analysts are bullish on cement companies. They believe that concentrating on prices rather than volume will result in stable or improved operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins before depreciation and amortisation. According to an analyst, one of the main reasons why cement companies' earnings have recently been upgraded is their desire to protect pricing. The analyst also said that while margins will improve in the second half of FY22, it will not be sufficient to offset rising raw material costs. As per the analyst, margins are expected to improve by 2-3% in FY23. EBITDA margins for large cement companies range from 13 to 27%. Demand from construction activities in the infrastructure, rural, and urban housing segments will boost cement makers' topline and profits as lockdown restrictions are gradually lifted. Image Source Also read: Cement demand may surpass 340 mt in FY22: ICRA Also read: Cement demand to sustain: India Ratings and Research

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code