Cement prices to be hiked, as demand improves
Cement

Cement prices to be hiked, as demand improves

According to market analysts, supported by pent-up demand and a favourable base, the cement industry will likely exit the fiscal year 2021 with better than expected volume growth.

As per ICICI Securities Ltd estimates, the cement industry is likely to post the highest ever quarterly volumes of around 105 million tonne (mt) with 20-22% year-on-year (y-o-y) growth.

However, investors must note that volume growth, particularly in the March quarter, is also backed by the cement industries' push to meet year-end sales targets by reducing prices.

Research firm Macquarie Capital predicts 13% demand growth in FY22, thanks to the government's infrastructure focus, healthy rural demand and a potential recovery in urban housing demand.

With the prospects of increasing demand and ongoing input cost inflation, cement companies are likely to announce another price hike of at least Rs 10 per bag. One cement bag weighs 50 kg.

Access current cement prices here.

The latest dealers channel check by Elara Securities (India) Pvt Ltd shows that after a price hike of Rs 10-16 per bag in the March quarter, cement companies may take another increase in April.

Elara Securities told the media that cement firms attempted price hikes of Rs 5-35 per bag across pockets in early March, and prices over the month have been stable in most markets despite year-end pressure.

As per market intermediaries of Madhya Pradesh, South India, Maharashtra, Delhi, Rajasthan, Bihar, Uttar Pradesh and West Bengal, cement firms may attempt a price hike in the range of Rs 10-30 per bag in April, said Elara Securities in a report on 29 March.

Currently, across the country, the average retail price of a cement bag is Rs 363.

A recent concern for investors in cement stocks has been the increasing cost of input materials such as coke, petroleum, diesel and coal. With a low-cost inventory of raw materials about to exhaust for many cement makers, the street is worried about compression in operating margins.

However, analysts noted that historically, cement companies have passed on the burden of increased costs to consumers to defend margins.

Image Source


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

Also read: Cement shares on a roll

According to market analysts, supported by pent-up demand and a favourable base, the cement industry will likely exit the fiscal year 2021 with better than expected volume growth. As per ICICI Securities Ltd estimates, the cement industry is likely to post the highest ever quarterly volumes of around 105 million tonne (mt) with 20-22% year-on-year (y-o-y) growth. However, investors must note that volume growth, particularly in the March quarter, is also backed by the cement industries' push to meet year-end sales targets by reducing prices. Research firm Macquarie Capital predicts 13% demand growth in FY22, thanks to the government's infrastructure focus, healthy rural demand and a potential recovery in urban housing demand. With the prospects of increasing demand and ongoing input cost inflation, cement companies are likely to announce another price hike of at least Rs 10 per bag. One cement bag weighs 50 kg. Access current cement prices here. The latest dealers channel check by Elara Securities (India) Pvt Ltd shows that after a price hike of Rs 10-16 per bag in the March quarter, cement companies may take another increase in April. Elara Securities told the media that cement firms attempted price hikes of Rs 5-35 per bag across pockets in early March, and prices over the month have been stable in most markets despite year-end pressure. As per market intermediaries of Madhya Pradesh, South India, Maharashtra, Delhi, Rajasthan, Bihar, Uttar Pradesh and West Bengal, cement firms may attempt a price hike in the range of Rs 10-30 per bag in April, said Elara Securities in a report on 29 March. Currently, across the country, the average retail price of a cement bag is Rs 363. A recent concern for investors in cement stocks has been the increasing cost of input materials such as coke, petroleum, diesel and coal. With a low-cost inventory of raw materials about to exhaust for many cement makers, the street is worried about compression in operating margins. However, analysts noted that historically, cement companies have passed on the burden of increased costs to consumers to defend margins. Image Source Also read: Cement demand to sustain: India Ratings and Research Also read: Cement shares on a roll

Next Story
Infrastructure Transport

Mumbai-Ahmedabad Bullet Train Set to Launch by 2028

India’s first bullet train is set to revolutionize high-speed travel along the western corridor, with the Mumbai-Ahmedabad high-speed rail project aiming for a 2028 launch. This announcement marks a major milestone in India’s infrastructure goals, as it promises to reduce travel time between the two economic hubs from eight hours to just three.Spanning a planned 508-kilometre stretch, the corridor stands as a flagship example of Indo-Japanese collaboration in technology and engineering. Once operational, the train is expected to transform intercity mobility and place India among the select..

Next Story
Infrastructure Transport

Mumbai-Gandhinagar Train Service Enhances Passenger Capacity

The Mumbai Central–Gandhinagar Capital Vande Bharat Express has increased its passenger capacity by adding four additional AC chair car coaches to meet the growing commuter demand on one of India’s busiest business corridors. This upgrade, effective from 11 May, raised the train’s seating capacity from 1,128 to 1,440 passengers, allowing it to serve 936 more passengers daily in both directions. The increase was described as a practical measure to accommodate the surging demand on the busy Mumbai–Ahmedabad–Gandhinagar route, which regularly operates at over 150 percent seat occupancy...

Next Story
Infrastructure Urban

Delhi Plans 12 Sewage Plants to Clean Najafgarh Drain Efficiently

Delhi’s ambitious plan to improve the water quality of the Yamuna River has gained significant momentum as the Delhi Jal Board (DJB) has begun work on 12 new sewage treatment plants (STPs) aimed at reducing the volume of untreated sewage being discharged from the Najafgarh Drain.This initiative forms part of the ongoing efforts to clean the Yamuna and restore the river’s health, which has long been a critical environmental issue for the national capital. Given the alarming pollution levels in the Yamuna, experts and officials consider this project a vital step toward addressing the persist..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?