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All India avg. prices are flattish to negative in Oct’24, international coal and pet-coke prices have inched up.

Our cement channel check suggests, all-India avg. trade cement prices were down by Rs1 per bag on a MoM basis in Oct’24. The East (-6), South (-Rs2), followed by flattish in West and Central, while North have witnessed a marginal price hike of Rs5 (Ref. page 3). During Oct’24, a few pockets took a price hike at the start/mid of the month but didn’t sustain it afterward due to regional, seasonal, and festive impacts, i.e., 1). Heavy rainfall across the geography, 2). Continuation of festive season, 3). Liquidity crunch and political issues in eastern region, 4). Delay in Amaravati work and slowdown in real estate work in southern region, etc

All India avg. cement price (trade segment) dropped by 0.1% MoM:

The avg. exit price for Oct’24 stood at ~Rs359 (a increase of Rs5 from 2QFY25 exit price of Rs354) which is equivalent to five-year low. On a MoM basis, prices were down by ~1.5% in eastern region followed by 1% decline in south region, while central and western region were flattish. Also, non-trade segment prices were almost flattish in Oct’24.

Demand remained flattish across the region on MoM basis:

After a sluggish demand in 2QFY25, the industry has witnessed flattish demand environment in Oct’24 primarily due to heavy rain and ongoing festive season. As per our channel check demand revival can be expected post Diwali and Chhath puja, however, some pockets in southern region are still under pressure due to delay in government projects.

Our View:

Pricing pressure is likely to continue, therefore we don’t see any meaningful price hike in the near term on account of the increase in competitive intensity due to new capacity additions and consolidation from larger players. We believe normalization may come by the end of FY26E in the industry once all the announced capacity comes under stream. However, regional players with higher market share, pricing power and cost savings may see margin expansion. The industry may witness some respite from the cost front considering stable diesel prices, higher usage of green energy and other cost initiatives despite marginal increase in international pet-coke prices in Oct’24.

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