The demand for cement is expected to increase by 8-10 percent due to the government capex infusion as per industry watchers, and this spells good news for the industry as a whole.
HM Bangur, the Managing Director of Shree Cement is optimistic that prices will start to rise once peak season starts.
“March to June is good demand. The prices should increase because of good demand. It is expected that from March onwards, when the peak season will start then demand should pick up. So we are a week away from some price rise,” he said.
Sreekanth Reddy, Joint MD of Sagar Cements also expects another Rs 10-15 per bag price increase in a month.
“The pricing of Rs 10 per bag got settled in the last week to 10 days with a hope that further hike should come by. So we hope another Rs 10-15 per bag should also come by before the middle of March - is what we are internally expecting,” he told CNBC-TV18 in an interview.
Meanwhile, brokerages suggest that cement companies have announced a rate hike of upto Rs 15 per bag across most regions with effect from February 16 mid-night after a gap of 3-4 months. Prices are hiked by Rs 15 a bag in south, Rs 5-15 per bag in West, Rs 10 a bag in North and Rs 5 a bag in Central and East region. However, some contrary reports came in that some of those prices have been pulled back.
According to Bangur, cement prices have remained flat in the fourth quarter of the fiscal year, as compared to quarter three levels.
“The prices were flat for quarter three before the closure and after the closure,” he said.
Another trend that Bangur highlighted is the increase in demand for personal housing in Tier-3 cities and villages. This is an interesting development, as it shows that there is a growing demand for housing outside of major cities.
This could lead to increased opportunities for cement companies that are willing to invest in these smaller markets.
The stock was up 5.15 percent in the last week and 13.62 percent in the past month.
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First Published: Feb 22, 2023 12:20 PM IST