Cement Industry Experiences Mixed Growth Amid Price Pressures

Leading cement manufacturers reported single-digit volume growth in the June quarter, though muted topline was due to continual price downtrends. Firms like UltraTech, Ambuja, Shree Cements, and ACC saw gains in volumes but faced pressure from soft cement prices and rising raw material costs. Future outlook remains optimistic with expected demand from infrastructure and housing sectors.

Leading cement manufacturers have seen single-digit volume growth in the June quarter, despite a muted topline as prices continue to fall.

Companies such as UltraTech, Ambuja Cements, ACC, Shree Cements, and Dalmia Bharat reported volume gains ranging from 3 to 9 percent and increased capacity utilization. However, soft cement prices exerted pressure on their revenues for the April-June period, coupled with marginally rising raw material costs due to increased prices of fly ash and slag.

The average all-India cement price was approximately Rs 348 per 50 kg bag in June 2024, a 3 percent decline year-on-year but an increase from Rs 335 in May 2024. For the initial two months of FY25, the average price stood at Rs 340 per bag, representing an 8 percent year-on-year decrease.

Furthermore, construction activities slowed in April-May due to an intense heatwave and general elections.

UltraTech Cement reported a flat consolidated net profit of Rs 1,696.59 crore for the June quarter, with revenue from operations up 1.87 percent to Rs 18,069.56 crore.

Other companies like Ambuja Cements and ACC also showed varied results. Ambuja Cements reported a consolidated net profit of Rs 789.63 crore, but results were not comparable due to acquisitions. ACC's net profit declined by 22.46 percent.

Shree Cement reported a significant drop in net profit, down 51.31 percent, although revenue from operations increased slightly.

The future outlook for cement makers is positive, with expectations of rising demand from the housing and infrastructure sectors due to a normal monsoon and large investments announced in the budget.