Cement-makers, banking on an improved demand in Jan–Mar period, to sustain a price hike of ₹14–16 per bag, pan-India, in April; apart from expecting a 6–7 per cent volume growth.
Sources said, South India is likely to see the highest price increase of ₹40–50 per bag (which would include the Mineral Tax component), while in North India hikes were lowest, at ₹5 per bag. Other regional increases were ₹10–15 per bag in East and Central regions and around ₹10 per bag in the West.
As against this, the cement-makers had initiated a ₹6–9 per bag, pan-India average price hike In March. East India saw a ₹10–15 per bag hike, and around ₹5 per bag price hike in Central India. In West and North, both these markets, the hikes were in the ₹4–7 per bag range.
In Jan, the average price hike (sustained) was ₹4-5 per bag, and in Feb at ₹8-10 per bag. In March it was around ₹5 per bag.
According to a cement-maker, it is yet to be seen whether the announced hikes in April will sustain or not.
For instance, February saw price improvements, with all-India average cement prices increasing by ₹5-15 per bag. In February, most players announced price hikes of ₹10-30 per bag, but partial roll-back followed within days, reflecting market resistance
“Cement demand was better in Q4 vs Q3 and this made a case for price hikes again in April. Now to see if the price hike sustains. There is some discount being offered at the retail level, so we need to see how things play out,” the official said.
Yes Securities, however, said, price hikes (in Q4) is not enough to lift sentiments. And volume growth could have been better.
Exit price for FY25 is in the ₹370–372 per bag range, sources said.
Changing Scenario
Average cement prices rose 2.5 per cent quarter-on-quarter (QoQ) across most regions except South India.
For cement-makers, Q4FY25 saw easing of competitive intensity and seasonal demand improvement. Volumes are expected to be up 7-8 per cent y-o-y during the period; versus 5-odd per cent Q3FY25 and a near-flat H1FY25.
According to an ICICI Securities report, the pan-India average cement prices are believed to have improved by 2 per cent quarter-on-quarter (on the back of a 1.5 per cent q-o-q uptick seen in Q3FY25).
“Margins could recoup 400 bps q-o-q, though on a y-o-y basis, it may slip 90 bps,” the report said.
In terms of demand outlook, market participants maintain, rural housing demand in witnessing some recovery; and there is possibility of rising government capex. In FY25, NHAI awarded road projects totalling 4,080km, falling short of its initial target of 5,000 km. For FY26, the NHAI is targeting 10,000 km of road highways.
Published on April 10, 2025
