Cement Companies Hike Prices Due To Increasing Demand And Profitability Pressure

Cement Prices Hike: Now more will have to be spent to build a house or shop, house, commercial property etc. because as soon as September comes, the cement companies have increased the prices. Due to less construction activities during the monsoon season, the prices decrease every year in July-August and this year also the same has been observed. However, now construction activities are increasing again in the month of September and in view of this, cement companies have increased the prices to take advantage of the high demand.

According to the news of Livemint, after the weakening of the south-west monsoon, its end is near and cement companies are expected to get good demand in the month of September. However, if the impact on the profits of cement companies is seen, then it has to be seen how long the high prices remain.

How much have the prices of cement increased in September

In September, companies have increased the prices of cement by Rs 10-35 per bag (50 kg cement each bag). According to Jefferies Limited, they have derived this figure after talking to some cement dealers. There was stability in prices in July, which turned into a fall of 1-2 per cent in cement prices in August. The rise in cement rates seems to be returning in September.

Rates are currently lower than a year ago

The April-June quarter saw strong growth in cement demand, although companies have focused on pushing volumes and increasing their percentage of market share, despite increasing prices. Due to its effect, a slight improvement was seen in the profits of cement companies. Cement prices were at Rs 355 per bag in the June quarter, marginally lower than Rs 358 in the January-March quarter. However, if compared to a year ago, the rates of cement in April-June 2022 were at Rs 365 per bag.

Cement prices will rise well in the July-September quarter – know why

Therefore, it is necessary that cement prices increase well in the July-September quarter so that cement companies can see an increase in earnings and operating profit. In the April-June quarter ie the first quarter of FY 2023-24, the operating profit of 42 cement companies fell by 7.5 per cent, while the cost of its raw materials remained almost flat.

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