The cement prices are expected to rise in the coming months, as per the Center for Monitoring Indian Economy (CMIE). Prices are likely to go up by 6.4% in FY’12 (after falling in the last fiscal) and are expected to increase by 3.8% in FY’13. Demand on the other hand, is expected to grow by a modest 4% in the last quarter of FY’12.
The rise in cement prices has been attributed to the rise in input and manufacturing costs. Prices of power and fuel cost have risen by 10.7% year-on-year (y-o-y) in FY’12 due to higher coal prices (both domestic and imports) and the cheaper rupee against the dollar. Also freight costs have been higher by 12.5% y-o-y due to increase in diesel costs and surcharge levied by railways. As a result cement prices in its largest market Mumbai, have gone up from Rs 248 in January 2011 to Rs 292 in January 2012.
However, the slowdown in demand has come in as a greater worry as major cement companies have reported a moderation in demand. For the industry as a whole, for FY’12, 31 million tonne per annum of capacity is expected to be added as against 55 million tonne added in 2010-11.
ACC, the leading cement producer, has reported a production of 2.14 million tonne for the month of Feb 2012 as against 1.97 million tonne in the corresponding period in 2011. Its dispatches increased from 2 million tonne in February 2011 to 2.15 million tonne in Feb 2012. Output of Ambuja Cement shot up from 17.91 lakh tonne in February 2011 to 19.93 lakh tonne last month. The dispatches rose from 17.74 lakh tonne in February 2011 to 20 lakh tonne in February 2012.
Cement production of UltraTech moved up by 3.02% at 357.28 lakh tonne for the period April-February FY ’12 as against 346.82 lakh tonne during April-February FY11. Its dispatches moved up by 3.2% at 357.41 lakh tonne in April-February FY’12 as compared to 346.33 lakh tonne in the corresponding period last fiscal. Cement output of UltraTech for February 2012 stood higher by 4.96% at 34.68 lakh tonne and dispatches at 35.17 lakh tonne, up 5.67% over February 2011.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: