Cement makers’ margins to be squeezed as input costs inflation starts to pinch

The days of soft input costs for the cement sector are coming to an end, according to analysts. Operating margins of cement firms would come under pressure in the December quarter (Q3) as input costs rise. Shares of key cement firms have scaled new highs as volumes recover. However, eroding margins could dampen investors’ sentiment towards the sector. On a sequential basis, prices of imported petroleum coke (petcoke) have risen by around 50 per cent, reaching $100 per tonne from the lows of $60-65 per tonne seen in previous quarters. Other discretionary expenses along with employee costs are also on the rise as volumes recover.