Price hikes improve cement profitability outlook: CLSA

30 Jun 2021 CW Team

Capital markets and investment group Credit Lyonnais Securities Asia (CLSA) Limited, told the media that the recent price hikes of the cement manufacturers aided the margin growth of the cement companies in FY22.

Cement companies had a consecutive increase in prices in March, April, and May. The current prices of all the Indian blended cement are 5-7% above Q4 FY21.

According to CLSA, the cement sector's profitability outlook has improved after the increases in prices.

It forecasts the industry's Ebitda per tonne will increase 3% year-on-year in FY22. Ebitda is short for earnings before interest, tax, depreciation, and amortization. CLSA expects that by FY24, the industry's profitability will be around 85% for a greenfield project to break even.

Some of the discretionary costs can be returned in FY22. Also, prices of higher commodities like coal, petroleum coke, and diesel are likely to increase. Cash cost per tonne is expected to increase 4% year-on-year in FY22.

For Q4 FY21, cement volumes were 15% higher and improved more than 25% year-on-year, while Ebitda per tonne was 3% up, compared to the previous quarter.

The impact of the second wave of Covid-19 is a key risk factor for the sector, CLSA said.

CLSA expects cement demand to grow 10% year-on-year in FY22 on a low base in FY21. According to the CLSA report, FY23 is likely to become normal before picking up again in FY24, a pre-election year.

Rural Independent Home Builders (IHB) and infrastructure will be the key demand drivers soon, with urban real estate likely to pick up with a lag. The sector's capacity and utilisation are poised to improve.

Image Source

Also read: Cement industry to witness improved demand from July 2021

Also read: Ambuja Cements and ACC bring industry 4.0 to Indian cement sector

Infrastructure Transport

10 Jul 2026

Uttar Pradesh unveils infrastructure-led growth roadmap at RAHSTA

Mumbai, 9 July 2026: Uttar Pradesh’s ambitious infrastructure-led growth strategy took centre stage on Day 2 of the 16th RAHSTA Expo, where senior government officials outlined how expressways, industrial corridors and technology-driven governance are transforming the state into one of India's most attractive investment destinations.Delivering the keynote address, Srihari Pratap Shahi, IAS, Additional Chief Executive Officer, Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), highlighted the state's long-term vision of integrating world-class expressways with industrial dev..

NCW closes PRIME Offices Fund at Rs 40 billion

Nuvama and Cushman & Wakefield Management (NCW) has announced the final close of its flagship PRIME Offices Fund at approximately Rs 40 billion, exceeding its original target of Rs 30 billion following strong investor demand.The fund was launched to provide Indian investors with access to institutional-grade commercial office assets across key office markets in the country. According to NCW, the increase in the fund size was supported by strong investor participation and the availability of investment opportunities in India's office sector.The fund has already committed around 45 per cent ..

Mayfair Housing adopts Autodesk Forma for digital project planning

Mayfair Housing has entered into a three-year strategic partnership with Autodesk to deploy Autodesk Forma, an AI-enabled cloud platform, as part of its digital transformation programme aimed at improving project planning and execution across its development and redevelopment portfolio.The platform will be integrated into the company's Building Information Modelling (BIM) workflow to support architects, planners and project teams during the early stages of design and development. Autodesk Forma combines real-world data, environmental simulations and collaborative workflows to facilitate data-d..