NEW DELHI: The all-India average cement price has seen a modest uptick, rising by ₹7 per 50kg bag in September, following a similar increase of ₹5 in August. This comes after prices hit a 51-month low between the end of July and mid-August. Despite the recovery efforts, the average price remains down ₹8 per bag quarter-on-quarter (QoQ) in Q2FY25, marking a 14-quarter low.
Regionally, East India led the recovery with a significant price hike of ₹16 per bag. North India followed with a rise of ₹10 per bag, while West and Central India saw increases of ₹6 and ₹5, respectively. Prices in South India, however, remained flat month-on-month (MoM). Despite these increases, the all-India average price dropped 7% year-on-year (YoY) and 2% QoQ in Q2FY25.
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September saw a slight improvement in demand compared to August, but the start of Pitru Paksha and intermittent rains in certain regions delayed the initiation of new projects. Specific issues like the unavailability of sand and concrete in Andhra Pradesh and delayed state fund disbursements further dampened demand. Market intermediaries remain cautiously optimistic, anticipating a demand uptick in the coming weeks, though the upcoming festival season could limit growth.
While South India initially showed price recovery in August, the region struggled to maintain these gains. Despite attempts to raise prices by ₹20-25 per bag at the start of September, increased supply and weak demand forced firms to retract the hikes, leaving prices largely flat across the region.
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Cement prices in Gujarat remained steady for the second consecutive month, while Maharashtra saw improvements. Prices in Mumbai, Nagpur, and Nashik rose by ₹10 per bag each.
The industry faces a challenging profitability outlook for Q2FY25 due to weak demand, falling prices, and negative operating leverage. However, gradual demand recovery is expected in the upcoming quarters, which may allow for further price hikes. Market observers anticipate that profitability could bottom out in Q2FY25 before rebounding.