Cement prices to rise in second half of FY22: HDFC Securities report
Cement

Cement prices to rise in second half of FY22: HDFC Securities report

According to the report by HDFC Securities, cement prices are likely to increase during the second half (H2) of FY22 owing to cost inflation.

Cement demand has increased from June 2021 as the Covid-19 pandemic decreases.

The cement demand continues to recover and has supported limited price correction during monsoon, the report says.

According to the report, the prices of cement will continue to rise during H2FY22 as the cost inflation is firming up and has impacted the cement industry. The rising demand and increased consolidation should support the industry's cost pass-through ability.

The report said that the prices of pet coke have increased by 20% quarter-on-quarter basis (QoQ). Imported thermal coal prices have also increased by 33% QoQ. The increasing prices of crude oil have pushed diesel prices by 7% QoQ. The industry has built Rs 80-100 million tonnes input cost inflation and Rs 20-40 million tonnes freight cost rise QoQ.

The brokerage expects aggregate revenue from its coverage to increase by 14% on a year-on-year (YoY) basis on higher volumes in the second quarter (Q2) of FY22.

Image Source

Also read: Cement production to increase by 12% in FY22: ICRA report

According to the report by HDFC Securities, cement prices are likely to increase during the second half (H2) of FY22 owing to cost inflation. Cement demand has increased from June 2021 as the Covid-19 pandemic decreases. The cement demand continues to recover and has supported limited price correction during monsoon, the report says. According to the report, the prices of cement will continue to rise during H2FY22 as the cost inflation is firming up and has impacted the cement industry. The rising demand and increased consolidation should support the industry's cost pass-through ability. The report said that the prices of pet coke have increased by 20% quarter-on-quarter basis (QoQ). Imported thermal coal prices have also increased by 33% QoQ. The increasing prices of crude oil have pushed diesel prices by 7% QoQ. The industry has built Rs 80-100 million tonnes input cost inflation and Rs 20-40 million tonnes freight cost rise QoQ. The brokerage expects aggregate revenue from its coverage to increase by 14% on a year-on-year (YoY) basis on higher volumes in the second quarter (Q2) of FY22. Image Source Also read: Cement production to increase by 12% in FY22: ICRA report

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