Cement prices in May stay firm despite Covid-19 disruptions
Cement

Cement prices in May stay firm despite Covid-19 disruptions

Cement prices have remained stable in May despite demand disruptions caused by Covid-19 lockdowns and restrictions.

This is because cement manufacturers continue to place a premium on price over volume growth.

In May, the all-India average cement price increased by 1.1% to Rs 356 per 50 kg bag. It was a tad lower by 1.3% compared to the previous year level.

Following firm prices and a gradual relaxation of lockdown across states, analysts are bullish on cement companies.

They believe that concentrating on prices rather than volume will result in stable or improved operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins before depreciation and amortisation.

According to an analyst, one of the main reasons why cement companies' earnings have recently been upgraded is their desire to protect pricing.

The analyst also said that while margins will improve in the second half of FY22, it will not be sufficient to offset rising raw material costs. As per the analyst, margins are expected to improve by 2-3% in FY23. EBITDA margins for large cement companies range from 13 to 27%.

Demand from construction activities in the infrastructure, rural, and urban housing segments will boost cement makers' topline and profits as lockdown restrictions are gradually lifted.

Image Source


Also read: Cement demand may surpass 340 mt in FY22: ICRA

Also read: Cement demand to sustain: India Ratings and Research

Cement prices have remained stable in May despite demand disruptions caused by Covid-19 lockdowns and restrictions. This is because cement manufacturers continue to place a premium on price over volume growth. In May, the all-India average cement price increased by 1.1% to Rs 356 per 50 kg bag. It was a tad lower by 1.3% compared to the previous year level. Following firm prices and a gradual relaxation of lockdown across states, analysts are bullish on cement companies. They believe that concentrating on prices rather than volume will result in stable or improved operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins before depreciation and amortisation. According to an analyst, one of the main reasons why cement companies' earnings have recently been upgraded is their desire to protect pricing. The analyst also said that while margins will improve in the second half of FY22, it will not be sufficient to offset rising raw material costs. As per the analyst, margins are expected to improve by 2-3% in FY23. EBITDA margins for large cement companies range from 13 to 27%. Demand from construction activities in the infrastructure, rural, and urban housing segments will boost cement makers' topline and profits as lockdown restrictions are gradually lifted. Image Source Also read: Cement demand may surpass 340 mt in FY22: ICRA Also read: Cement demand to sustain: India Ratings and Research

Next Story
Resources

Madhya Pradesh Champions Inclusive Tourism at Heritage Sites

On the occasion of World Heritage Day, Madhya Pradesh is taking a significant step toward inclusive tourism by making its historical sites accessible to all — especially persons with disabilities. The state is rolling out its ‘Accessibility Infrastructure and Development’ project at Maheshwar, Mandu, Dhar, and Orchha, aiming to create a more welcoming experience at these iconic cultural destinations.The initiative, under the leadership of Chief Minister Dr Mohan Yadav and Tourism Minister Shri Dharmendra Bhav Singh Lodhi, includes infrastructure upgrades such as ramps, Braille signage, w..

Next Story
Resources

Runwal Realty Onboards Sonam Kapoor as Brand Ambassador

Real estate major Runwal has unveiled a refreshed identity as Runwal Realty, signalling a renewed commitment to crafting spaces that stand the test of time. With this refresh, the brand unveils its new philosophy: “Building for Generations to Come” and welcomes Bollywood star and global fashion icon Sonam Kapoor as its brand ambassador. This evolved identity reflects Runwal Realty’s commitment to creating not just homes, but heirlooms—crafted through visionary design, meticulous planning, global design expertise and an unwavering focus on quality. With the customer at its core, each de..

Next Story
Infrastructure Urban

Emerging Trends in Infrastructure and Transport 2025: KPMG

KPMG’s latest report, The Great Reset: Emerging Trends in Infrastructure and Transport 2025 edition, sheds light on the profound changes transforming the global infrastructure landscape. As industries adapt to the challenges posed by climate change, economic pressures, and technological advancements, the report identifies key trends and provides actionable insights for leaders in infrastructure and transport sectors. “In today’s interconnected world, the lack of standardized supply chain practices is not just an operational challenge—it’s an environmental and economic one. We’..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?