Indian Cement Prices Likely to Roll Back Hikes Amid Weak Demand, Hopes Pinned on Q3FY25 Recovery

Nuvama Institutional Equities reports Indian cement companies may have to roll back recent price hikes due to weak demand. Price recovery is expected by Q3FY25, driven by post-monsoon construction activities. Regional price variations and demand improvements are anticipated later in FY25.


Devdiscourse News Desk | Updated: 10-09-2024 13:42 IST | Created: 10-09-2024 13:42 IST
Indian Cement Prices Likely to Roll Back Hikes Amid Weak Demand, Hopes Pinned on Q3FY25 Recovery
Representative image. Image Credit: ANI
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Industry expectations for Indian cement prices have dimmed, as Nuvama Institutional Equities indicates that recent price hikes could be rolled back due to sustained weak demand. The sector is expected to see improvement only by Q3FY25, when post-monsoon activities revive construction demand.

The report highlights regional disparities in price weakness, with many dealers anticipating a price recovery in the latter half of FY25. The first half of FY25 is not expected to see significant price increases due to sluggish demand exacerbated by seasonal factors such as the monsoon, labor shortages, and construction slowdowns. August saw a continuation of the price drop driven by these challenges.

In the Eastern region, prices dropped by Rs 5-7 per bag in August, with demand predicted to improve only post-Durga Puja in H2FY25. The Southern region faced the steepest decline, with prices falling Rs 10 per bag. Despite some regional price hikes, such as Rs 20 per bag in the non-trade segment and Rs 30 per bag in Karnataka, the overall absorption remains uncertain. Similar trends of sluggish demand and minor price adjustments were noted in the Northern, Central, and Western regions, with some expecting a recovery only by mid-October.

High costs and a carefully cautious industry sentiment underline the challenges faced by the sector. While cost-efficiency measures and lower power and fuel expenses could alleviate some concerns, significant price hikes remain unlikely in the immediate term.

(With inputs from agencies.)

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