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Informist, Monday, Jun. 8, 2026

 

--Shree Cement chair: Consolidation in cement sector will continue 

--CONTEXT: Shree Cement Chairman Hari Mohan Bangur at ICICI Securities event 

--Shree Cement chair: Managing energy cost to drive success of cement sector 

--Shree Cement Chair: Pricing power totally absent for cement cos right now 

--Shree Cement chair: Serious price hikes to come only after 3-4 years 

--Shree Cement chair: Ready-mix-concrete to be future of cement industry 

--Shree Cement: 14-15% return on capital employed unlikely for cos near term 

 

NEW DELHI/MUMBAI – The cement industry will witness serious price hikes after three to five years when new mines will operate, Hari Mohan Bangur, chairman of Shree Cement Ltd., said at an event on Monday. According to Bangur, pricing power is completely absent among cement companies at present. 

 

"Price increase will be totally dependent on demand and supply...Price rise will come seriously after three to five years when the new mines will be operating. New mines are being purchased at significant premium to the old existing mines," Bangur said. 

 

According to Bangur, cement prices have risen only by a compounded annual rate of 3% over five, 10, and 20 years. "Cement prices are not increasing. In fact, cement is the cheapest material available in the world. It is around INR 7 per kilogram, delivered to the customer's place, and INR 3.5 per kilogram at the factory site," Bangur said, adding that cement price inflation is due to transport costs, dealers' and distributors' margin, and goods and services tax of 18%.

 

Bangur said the success of the cement industry would depend on managing energy costs, logistics costs, and balance sheet strength. 

 

Existing capacity utilisation for the cement industry is 65-70%, according to Bangur. "...It seems very low capacity utilisation. But we have to see from the clinker point of view. What we are counting is cement capacity, which depends upon basic raw material clinker. When we see, compared to clinker, our 65-70?pacity utilisation will become 85%, because everyone is putting 25-30% extra cement grinding capacity," Bangur added. 

 

The ready-mix-concrete will be the future of cement industry, according to Bangur. "Ready-mix-concrete in India is only 15%. Most of the cement is consumed as RMC and as soon as the concrete is made, the brand value becomes zero. Because then we are selling the concrete.....In 5 to 10 years, we feel that most of the cement will be used as concrete," Bangur said, adding that Shree Cement has achieved 35 to 40 new concrete units in two years.

 

Bangur said consolidation in the cement industry will continue "because of low return in capital." According to Bangur, cement companies are unlikely to see 14-15% return on capital employed in the near term. 

 

For the March quarter, Shree Cement reported a net profit of INR 5.32 billion on revenues of INR 56.43 billion. At 1324 IST, shares of Shree Cement traded 1.4% lower at INR 23,750 on the National Stock Exchange.  End

 

Reported by Astha Oriel and Anshul Choudhary

Edited by Avishek Dutta

 

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