Lower sales realisation hit margins of cement makers

| | New Delhi
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Lower sales realisation hit margins of cement makers

Monday, 04 November 2024 | PTI | New Delhi

Major cement manufacturers reported a decline in margins in the September quarter, mainly on account of lower prices, leading to lower sales realisation.

Barring three leading cement producers UltraTech Cement, Ambuja Cement, and Dalmia Bharat other smaller players, including Nuvoco Vistas Corp, JK Cement, Birla Corporation, and Heidelberg Cement, reported a decline in topline and sales volume in the second quarter of the current fiscal year.

Industry observers said the increase in sales volume of UltraTech and Ambuja Cements is mainly due to the several acquisitions by both companies that consolidated their position further in the industry.

The industry also faced challenges such as extended monsoon, floods, and a slow pickup in government demand, cumulatively leading towards a weak demand.

Power, fuel, and other costs, however, largely remained stable for the industry. The all-India average cement price was around Rs 348 per 50 kg bag in June 2024. It decreased 11 per cent year-on-year to Rs 330 per bag in September, though it increased 2 per cent on a month-on-month basis.

In the first half of FY25, cement prices declined 10 per cent year-on-year to Rs 330 per bag. A year earlier, the average prices stood at Rs 365 per bag and Rs 375 per bag in FY23, according to an Icra report.

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