Many cement companies are likely to hike the price of per bag of cement between Rs. 10 and Rs. 30 in November in the eastern region.

A sectoral report by Emkay Global Financial Services Limited predicted that the cement companies based out of Southern and Eastern regions are likely to hike the maximum, while there will be a pan-India increase in prices of cement.

The sectoral report said the average pan-India cement price increase was about Rs.3-4/bag in October 2022.

On a month-on-month (MoM) basis, prices rose by 2-3 percent in the East and South, and about one percent in the West; while declining by 1-2 percent in the northern and central regions, the report said.

"Cement companies are attempting price hikes of Rs. 10-30/bag across regions on November 22. Absorption of these price hikes will be uncovered over the next few days," said Emkay Global.

Industry volumes are likely to have declined by a high single-digit YoY and a low double-digit MoM, on October 22, owing to a high base, as the festive season was spread across October-November last year.

According to the report, a delayed exit of monsoons and labour shortage owing to festive holidays impacted demand on October 22.

The demand is expected to improve in upcoming weeks, with all major festivals ending and given the onset of a busy construction season.

The cost pressure is expected to ease in coming quarters for the industry players and the industry margins are expected to bottom out in Q2, with the peaking of costs, higher exit of cement prices, and pick-up in construction activities in coming quarters said Emkay Global.

The international petcoke prices are down by about 30 percent from the peak of USD 195/tonne. Further, the dip in the fuel prices is expected to provide cost savings of at least Rs 150-200/tonne from Q3FY23, Emkay Global said.

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