vikasmudra desk
Cement Prices in India, which recorded a growth till October this year cooled off in November, but could rebound in the coming days, according to media reports that quoted rating agencies. On an average cement prices on a pan-India level declined by around 3 percent in November compared to the previous month. Among regions, east and south India saw higher price corrections than other markets.
Across regions, the South India witnessed highest decline in price at 4.8 percent month-on-month), followed by the East which recorded 3.2 percent month-on-month). Prices in the north, west and central region, prices remained largely unchanged during the month. Reports quoting analysts at IIFL Securities Ltd said the price decline in the East has completely reversed the hikes taken in October 2021 and prices are now back to the end-September level,
Cement prices recorded a marginal decline in Kerala also where the cement prices are among the highest in the country said, Sirajuddeen Illathodi, a leading cement dealer and president of Kerala Cement Dealers’ Association. However, it is likely to climb up by January, he added. It is pointed out that a few companies which close their accounting year in December tend to sell at lower prices by the end of the year to increase sales levelling off prices in the market.
According to rating agency Crisil, the retail prices of cement, after rising by an average Rs 10-15 per bag pan-India since August, are likely to go up another Rs 15-20 over the next few months and touch all-time highs of Rs ~400 per bag in the months ahead.
Meanwhile it is pointed out that the price of raw materials for cement production remain high and the impact of the rationalising of petroleum and coal prices could take time to reflect on transportation and production costs of cement companies.
The earnings before interest, tax, depreciation, and amortisation (Ebitda) of cement makers will decline by Rs 100-150 per tonne this fiscal because of high input costs. Cement sales volume is expected to rise 11-13 percent on-year this fiscal, albeit on a low base. This will largely offset the impact of cost pressure on cash accruals and keep credit profiles stable. A Crisil Ratings analysis of 17 cement companies, which have a volume market share of 75 percent in India, indicates as much.
