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Our cement channel check suggests, As of 18th Dec’24, all-India avg. cement prices stand at Rs366 (an increase of Rs8/bag) of 50 kg bag as compared to Nov’24 exist price of Rs358/bag. Central region has witnessed highest price hike of Rs11/bag followed by south/north/ east of Rs8/bag while the least price hike of Rs5/bag in western region. Baring AP/Telangana, most of the pockets have taken a price hike in the range of Rs5-15/bag which have sustained till now despite a sluggish demand environment.

All India avg. price in 3QFY25 remains below the five years avg. price of Rs365/ 50 kg bag:

North and central has seen highest price hike in 3QFY25 followed by east and west, while southern prices remained weak and mere increase. Northern region avg. prices were up by Rs16/bag on QoQ basis, while central prices were up by Rs8/bag on QoQ basis in 3QFY25. East and west prices were up by Rs4/bag on QoQ basis, while south prices were only up by Rs1/bag on QoQ basis in 3QFY25 (mainly due to no price hike AP/TN in Dec’24). All India avg. cement prices up by Rs7/bag in 3QFY25 to Rs361/ 50 kg bag as compared to exist price of Rs354/ 50 kg bag in 2QFY25 but remains below the five years of avg. prices.

The recent price hike may not be meaningful as its being hyped:

Southern region avg. cement prices were up by ~Rs8/bag mainly led by Rs15/ Rs8 per bag price hike in Bengaluru/ Chennai, but surprisingly, there was no price hike in AP/TN during Dec’24 which considered as biggest market in the region. This is mainly due to higher competition and regional players were not in the favor of price hike instead more focused on volume gain. It’s natural for Karnataka and Chennai as their prices were too low from past many quarters as compared to other southern region states. During Dec’24, most of the pockets have taken a price hike of Rs10-15/bag in central region led by marginal improvement in the demand. Bhopal have witnessed a price hike of Rs12/bag followed by Indore and Lucknow of Rs10/bag respectively. We believe, the recent price hike in central region sustains for the rest of the month and expect Jan-Feb’25 may continue with the same price. In easter region, baring Kolkata (up by Rs3/bag), Bhubaneswar and Patna have taken a price hike of Rs10/bag as against announced price hike of Rs20/bag in the states. Similarly, in north, Delhi and Jaipur have taken a price hike of Rs10/bag while Ludhiana prices were only up by Rs5/bag. There were only Rs5/bag price hike across Mumbai, Pune and Ahmedabad. The price hike is very minimal as compared to other region due to subdued demand, especially election month in Mumbai.

Our View: All India cement avg. prices are at the level of five years avg. prices (Rs365/bag) and we believe the price have already bottomed out and expect stable to gradual increase in price going forward. But we don’t see any sharp hike of Rs50- 60/bag in near term, instead in the range of Rs5-10/bag if demand favors. However, the big catch is, the RD (rate difference), the avg. rate difference has increased and higher at Rs35-45/bag which would ideally go the dealer and distributor from the company pockets. So, the recent price hike is meaningless as per our view. We don’t see any significant movement in government capex until 1Q/2Q FY26E due to regional, seasonal and liquidity issues in some specific states (i.e., eastern, and southern regions). While private capex to fill the gap to some extent till then. We are neutral to negative for sector for FY25E and may change our view in 2QFY26E.

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