According to a report, cement prices increased by Rs 24-25 per bag of 50 kg in February as compared to the previous month amid falling cost and rising demand growth. The hike in the cement prices came after a “protracted stall” following the rollout of GST in July 2017 as per the CRISIL report. The increase would help the cement industry increase profitability and margins.
The southern region had the steepest hike with Hyderabad witnessing a rise of Rs 77 per bag, Rs 62 per bag in Chennai and Rs 52 per bag in Bengaluru. The other regions had a moderate increase, with Rs 26 in the west, Rs 12 in the east, Rs 7 in the central region, and Rs 4 per bag in the north.
In the current financial year too, cement prices saw a decline of 2.5 per cent between April 2018 and January 2019 despite healthy demand growth of 12.5-13 per cent in the nine months.CRISIL Research Senior Director Prasad Koparkar said that the price hikes, coupled with falling costs and rising demand growth, will enable 200-250 bps (basis points) on-year improvement in margins in the current quarter. Sustainability of these prices beyond the current quarter is uncertain as demand momentum is seen coming off in the first half of the next fiscal, given the impending elections.
India is the second-largest producer of cement in the world after China, with an installed capacity of 472 million tonnes per annum.
Source:Â https://economictimes.indiatimes.com/industry/indl-goods/svs/cement/cement-prices-rise-rs-25-per-bag-in-february/articleshow/68273483.cms
