After a spectacular performance in the last September quarter most of the cement companies continued their good run up on the bourses. The revenues and profitability are being driven by volume growth in high margin white cement as well as grey cement. White cement volume grew good 24.9 per cent year-on-year and 9.4 per cent sequentially in the back of strong demand.
Cement companies continue to face challenges owing to weak demand, rise in production costs and excess capacity. While the demand was expected to pick up last month, the pricing power of cement firms is expected to decline marginally. This has been due to several fresh capacities flowing into the markets in the last few months. The industry plans to add new capacity of about 71 mn tonne in the next two financial years. At present, it has an installed capacity of over 315 mn tonne to cater to t
The Competition Appellate Tribunal (COMPAT) has started hearings on the plea of 11 cement companies seeking stay on Rs 6,307 crore ($1,160.4 mn) penalty imposed by fair trade regulator Competition Commission of India (CCI) on the grounds of cartelisation.
Factors such as rains and festivities affect cement demand in India every year from August to November. Even discounts offered by MNC cement companies to meet their year-end targets also lead to reduction in realisations.
Cement Stockists and Dealers Association of Mumbai predicts that the margins of cement companies will improve going forward. According the Association president Sanjay Ladiwala cement prices increased from Rs 18-25 across the board.
The cartelisation charges facing eleven cement companies and a trade body that are being penalised Rs 6,714.83 crore by the Competition Commission of India (CCI) are drawing up plans to question the legality of the case when it comes up for hearing before the Competition Appellate Tribunal (Compat) on 29 January.