The Indian cement industry is expected to witness a robust recovery in the second half of FY25, stated a report by Motilal Oswal Financial Services Ltd (MOFSL). This, it added, will be driven by pent-up demand, a rebound in government capex, and sustained momentum in the real estate and housing sectors.
During October-November 2024, industry volumes grew by 3-5 per cent on-year despite a challenging October due to unseasonal rains, a high base from the previous year, and the overlap of festive seasons. November, however, saw a significant 20-22 per cent YoY growth, recovering from October’s 10-11 per cent decline. For H2FY25, per analysis by MOFSL, volume growth is projected at 8-9 per cent YoY, with expectations of a strong start to FY26 during the March-June period, typically the peak consumption window.
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Cement price status
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Per the analysis report, cement prices have largely remained flat month-on-month (MoM) in November 2024. Historically, second-half realizations have trended lower by 1-6 per cent compared to the first half over FY13-24. Competitive pricing pressures could pose risks to FY25 earnings if these trends persist, it said.
On the cost side, imported petcoke prices rose by 3-5 per cent MoM in November, while imported coal prices (South African) remained stable. MOFSL said, “Consumption costs for imported petcoke stood at Rs 1.20/Kcal, compared to Rs 1.65/Kcal for South African coal. Lower fuel prices are expected to improve cement spreads by Rs 25-30 per ton in H2FY25 over H1FY25. EBITDA per ton is projected to grow 23 per cent sequentially during this period, supported by marginal realization gains, positive operating leverage, and cost optimization measures, including increased use of green energy, alternative fuels, and improved logistics efficiency.”
According to YES Securities, all India cement average prices are at a level of five years average prices (Rs 365/bag) and per the brokerage firm,
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