Cement prices going north
The cement demand has been improving across the country and as a result cement prices have been heading north from March this year. For the record, in Mumbai, the prices increased in March on a month-on-month basis by Rs 15/bag. In Kolkata, the increase was Rs 25/bag, in Bengaluru, Rs50/bag, in Chennai, Rs. 60/bag and in Hyderabad, Rs. 75/bag. Prices have increased in April-May as well. The prices are higher by Rs 35-40/bag in Mumbai, Rs 55-60/bag in Delhi, Rs. 35/bag in Chandigarh, and Rs 60-70/bag in Hyderabad during the two months, on a year-on-year basis.
These along with easing freight expenses, owing to the increase in the truck axle load norms from Q2, is likely to result in relatively higher operating profitability for cement companies the near-term, says an Icra report.
Cement production was higher by around 13 per cent YoY in FY19, up from 6 per cent YoY growth in FY2018. The double-digit growth rate is likely to get moderated in FY20 to 7-8 per cent, Icra said.