Cost sides remain for cement sector

Cost sides remain for cement sector
22/02/2017 , by , in ALLIED

There may still be some pain left for cement companies, going by a Kotak Institutional Equities report that suggested a bleak fourth quarter for the industry. It said all-India cement prices recovered by Rs 6/bag month-on-month to Rs 321/bag, arresting the declining trajectory that saw cement prices drop by Rs 15/bag since demonetization up until January 2017.

Cement stocks like Ambuja Cement, Ultra Tech Cement and Shree Cement were up between 0.55-1.24 per cent on Monday at market close.

It said however that volume data reflects an 8 per cent year-on-year decline in cement volumes in December 2016, though interactions with industry participants suggest normalization in demand. “Cost-side pressures, however, remain on both fuel and freight costs, pointing towards a bleak 4QFY17 save for some improvement in cement prices during the month,” it said.

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