More Stories

Informist, Friday, Aug 23, 2024

 

--Dealers: Cement cos plan price hike in Andhra Pradesh, Telangana 

--Dealers: Cement cos plan price hike in Tamil Nadu, Karnataka 

--Dealers: Cement cos aim for 20 rupees/50-kg bag hike in south India 

--Dealers: Yet to pass on cement price hike to customers 

--Dealers: Market unlikely to absorb price hike as demand low 

--Dealers: UltratTech, India Cements, Ramco Cements plan price hike

--Dealers: ACC, JK Lakshmi, NCL Industries plan price hike 

--Dealers: Sagar Cements, Orient Cement, Shree Cement plan price hike

By Narayana Krishna and Anshul Choudhary

HYDERABAD - After two-three months of seeing volatile prices, cement companies with a larger presence in south Indian markets plan to raise prices by 20 rupees per 50-kg bag, dealers told Informist. Dealers in Telangana, Andhra Pradesh, Tamil Nadu and Karnataka confirmed the price hike plans, but said they are yet to pass on the price hike to consumers as demand for the commodity is weak and there is resistance from buyers.

 

Confirming the price-hike plans, a top official of a large Hyderabad-based cement company said the price hike aims to cushion companies from cost pressures. Cement prices have been under pressure for the last two-three months due to weak demand during the Lok Sabha elections and slower construction activity during the monsoon, dealers said. 

Once these price hikes are brought into effect, the average price of a 50-kg cement bag in Telangana, Andhra Pradesh and Tamil Nadu will be 270-330 rupees, dealers said. Prices in Karnataka will be 10-20 rupees higher than this. 

Companies such as UltraTech Cement, Orient Cement, KCP, India Cements, Sagar Cements, Ramco Cements, JK Lakshmi Cement, NCL Industries, and several private brands with significant market presence in southern states have planned the price hikes, dealers said.

 

A few Mumbai-based research analysts who cover the cement sector said their channel checks have also confirmed that companies are planning to raise prices. "I'm hearing from south-based dealers that an attempt was made but no hike due to low demand yet," a research analyst with a domestic brokerage said.

 

Nomura said in a note today that the cement companies have announced price hikes with pan-India prices rising 17 rupees per 50-kg bag to 347 rupees, up 5% from prices at the start of this month. "In our view, these announcements have been made more to restrict further moderation than to increase prices," the brokerage said. It added that these price hikes are likely to be rolled back due to weak demand.

 

Another Mumbai-based analyst from a top brokerage said that these price hikes will be difficult to sustain. "There is some uncertainty around these prices hikes...at max, the companies may be able to retain 10-15 rupees of hike," the analyst said. 

 

The analyst also pointed out the pricing has been weak because of discounts undertaken by large players over the past year, which has reduced the price gap with smaller players. However, things may improve in the second half of this financial year once the monsoon season ends and construction activity resumes in full swing, he added.  End

 

Edited by Tanima Banerjee

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.