Cement prices likely to decline 1-3% on rising competition, falling input costs: Crisil Ratings
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Crisil Ratings in its latest report has said that after clocking a 4 per cent compound annual growth rate over the past four years, cement companies are likely to cut prices marginally by 1-3 per cent this fiscal despite healthy demand, owing to the increasing competition. Report stated cooling input costs will also help cut retail prices.
He stated prices have already moderated since early 2023 on the back of a gradual softening of energy costs and manufacturers' efforts to gain market share in a seasonally strong fourth quarter. The cement prices hit an all-time high of Rs 391 per 50/kg bag last fiscal. It noted the record price run-up was due to the disruptions caused by the pandemic, followed by a sharp surge in input costs, especially thermal coal, further aggravated by the Russian invasion of Ukraine in February 2022.
Besides, it said the rising competitive intensity can be gauged from the fact that for the first time in several years, there were no pre-monsoon price hikes in April and May despite steady demand. The drive to push market share is evident from the top five players who control 55 per cent volume share last fiscal compared to 49 per cent pre-pandemic.
