Cement companies mull price hike of Rs 10-30/bag

CHENNAI: Cement companies are planning to hike the price between Rs 10 and Rs 30 per bag in November after a increase of about Rs 3-4/bag last month, said Emkay Global Financial Services Ltd.

Emkay Global in a recent sectoral report said the average pan-India cement price increase was about Rs.3-4/bag in October 2022.

On a month-on-month (MoM) basis, prices rose by 2-3 per cent in the East and South, and about one per cent in the West; while declining 1-2 per cent in the northern and central regions, the report said.

"Cement companies are attempting price hikes of Rs10-30/bag across regions in November 22. Absorption of these price hikes will be uncovered over the next few days," said Emkay Global.

Industry volumes likely to have declined by a high single-digit YoY and a low double-digit MoM, in October 22, owing to a high base, as the festive season was spread across October-November last year.

According to the report, a delayed exit of monsoons and labour shortage owing to festive holidays impacted demand in October 22.

The demand is expected to improve in upcoming weeks, with all major festivals ending and given the onset of a busy construction season.

The cost pressure is expected to ease in coming quarters for the industry players and the industry margins are expected to bottom out in Q2, with peaking of costs, higher exit of cement prices and pick-up in construction activities in coming quarters, said Emkay Global.

The international petcoke prices are down by about 30 per cent from the peak of $195/tonne. Further the dip in the fuel prices are expected to provide cost savings of at least Rs 150-200/tonne from Q3FY23, Emkay Global said.