Price hikes key trigger for cement majors

Cement had a slow quarter with volumes up 3 per cent year-on-year (Y-o-Y) on average in the second quarter of the current financial year (Q2FY25).

- DEVANGSHU DATTA

Seasonal weakness has hurt demand.

Ultratech Cement saw volumes up 3 per cent, while Shriram Cement was the top volume gainer at 9 per cent, with Dalmia Bharat up 8 per cent. But aggregate realisations fell 7 per cent Y-o-Y and about 2 per cent Q-o-Q with prices falling sequentially.

Operating profit margin pressures may have been offset a little by lower fuel costs. But aggregate operating profit/tonne fell by over 25 per cent Y-o-Y and Q-o-Q to ₹645 from around ₹890/tonne Y-o-Y and about ₹840/tonne on a sequential basis.

There may be demand pickup in the second half of FY25, aided by the Budget's infrastructure push, normal monsoons, and improving rural sentiment. Supply is also up due to capacity additions. Early November price hikes were largely followed by partial or complete rollbacks.

The all-India average retail price is flat month on month (M-o-M) at ₹353 per 50kg bag. Prices have suffered three consecutive quarters of 3 per cent Q-o-Q decline and are down 10 per cent Y-o-Y.