High input costs to prevent cement plants from cutting prices, Real Estate News, ET RealEstate
“Cement achievements grew an average of 2% year-on-year in FY21 on a pan-Indian basis, while prices were highest in the south with a 9-16% year-on-year increase.” said India Ratings and Research (Ind-Ra).
“Despite higher demand, the Eastern region has seen a decline in achievements with the influx of supplies. Ind-Ra believes that achievements at 1QFY22 have been sequentially higher despite the impact of the second wave. “
According to the report, price increases were recorded in most regions in June 2021, although reports indicate a partial pullback in many pockets except the North.
Further, the rating agency stressed that with a gradual easing of closures and pent-up demand ahead of the monsoon, June is expected to have seen sequential growth of around 20% despite the rains affecting construction in parts of the country, resulting in 35 -40% year-on-year growth in 1TFY22 on a weak basis.
“The volume of cement transported by rail saw a 22% month-on-month increase in June 2021.”
Further, he said the listed universe, which typically accounts for 75 to 80 percent of total industry volumes, reported stable volumes in FY21 despite a 30 percent year-over-year decline. in the 1st quarter of the financial year21.
“Volumes during 4QFY21 were 9% higher than 4QFY19 (the last normal 4Q), indicating significant growth, driven by strong demand for rural housing and infrastructure.”
“Capacity uses reached 89% in the fourth quarter of FY21, which, together with higher clinker use, indicates that almost all of the effective capacity was used in the quarter. . . “