UltraTech market-share focus to pay off when cement prices rise

UltraTech market-share focus to pay off when cement prices rise
25/01/2019 , by , in ALLIED

Intense competition and demand that has often not reflected the pace of broader economic expansion have prevented cement manufacturers from raising prices. In this battle of attrition, the undisputed leader UltraTechhas focused on gaining market share rather than experiment with pricing. It has been unwaveringly following this strategy for the past two years. The story in the December quarter is not structurally distinct.

In the December quarter, Ultra-Tech’s sales volume grew by 14 per cent to 18 MT in comparison with the same quarter last year. Its cement realisations did not show any noticeable improvement on quarter, a clear indication that the company has been unable to gain any pricing power.

A large part of the stable demand for cement, although not great in value terms, still comes from non-trade or institutional segment. This segment comprises infrastructure and low cost housing (both from government and private). It is estimated that the low-cost housing programme of the government –Pradhan MantriAwasYojana – Gramin (PMAY) has generated 28-30MT demand of cement.

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