Price trends in the domestic cement industry have remained subdued for some time. According to a recent Jefferies India traders’ check, there was a 1.5% decline in the all-India average cement price to ₹362 per 50-kg bag in January. The decline was more pronounced in the eastern region, with a 2.2% drop, followed by a 2% decline in the northern region month-on-month.
There is a risk for cement companies’ performance in the March quarter (Q4FY24) if prices remain muted in the near term. Although there have been announcements of price increases in some markets for February, traders remain uncertain about their implementation, according to the February 1 Jefferies report. On a brighter note, the softening of coal and petcoke prices may ease some of the pressure on profitability, partially offsetting the impact of weak pricing.
“We expect cement companies’ profit to remain flat/decline sequentially in Q4FY24 as falling input prices and higher operating leverage are likely to be offset by lower cement prices,” said a February 2 Emkay Global Financial Services report .