After chasing volumes, cement cos hike prices

Higher prices are key to profitability as input prices remain volatile

- Ujjval Jauhari

New Delhi: After a lull, cement makers have begun raising prices in September, expecting growing construction demand to sustain with the south-west monsoon drawing to a close. However, it remains to be seen if higher prices will stick, and give the much-needed push to profitability.

In September, companies raised prices by ₹10-35 per 50kg bag, analysts at Jefferies India Ltd said, after an interaction with dealers. The price hike follows 1-2% month-on-month decline in the price in August, and stable prices until then.

The June quarter saw strong demand for cement, but instead of raising prices, companies chose to push volumes and expand the market shares. Consequently, there was little improvement in profitability. Average June quarter cement price at ₹355 was slightly lower than ₹358 in January-March, and significantly lower than ₹365 a year ago.