Cement Prices to be a little bit high until November

Brokerage firm Antique announced the price hikes of cement that each cement will rate Rs.10 to Rs.20 across the regions from this week.

“Price hike announcements may continue till mid-November. A similar trend was observed last year when companies had undertaken an average price hike of Rs.30 per bag post monsoon till mid-November 2023,” the brokerage company said.

Though the firm noted out the wholesale price hikes last year were moved back from mid-November 2023 to March 2024 as the cement organizations aims on augmenting utilization such as captivating the newer capacities.

As well, with the prices is getting down, the cost of the cement sustained to slip even after the month of March 2024 and the current regular prices are dipped down 6 to 7% Y-o-Y & are near to the three year low.

As per the analysts, If any stocks of Shree Cement, JK Cement and Ultratech Cement persist to be the firm’s selected picks on the end of balance sheets, the cost curve is probably to continue to go down in the second-half of the fiscal year (well cost efficiencies and operating control and so on) and larger than 35 mtpa capacities are probably to be added in the similar period, this hike extent would be a vital role for any significant incomes upgrade.

“Our channel checks suggest that industry volumes have likely remained largely flat YoY in 2Q till date (Jul-Aug 2024) on a relatively high base and monsoon. South likely saw a high single-digit YoY fall (similar to the 1Q trend), while the rest of the regions likely saw a marginal low single-digit YoY growth”, the brokerage firm added.

Taking the overall outlook into an account, the brokerage company said, the demand for cement continues to be low in the July to September quarter.

Also it has stated 7 percent demand of CAGR in the financial year 2024 to 2027 compared to 5 percent CAGR in the financial year 2021 to 2024 factored by the major expenditure of government on housing and infrastructure segment.