Price hikes improve cement profitability outlook: CLSA
Capital markets and investment group Credit Lyonnais Securities Asia (CLSA) Limited, told the media that the recent price hikes of the cement manufacturers aided the margin growth of the cement companies in FY22. Cement companies had a consecutive increase in prices in March, April, and May. The current prices of all the Indian blended cement are 5-7% above Q4 FY21.
According to CLSA, the cement sector's profitability outlook has improved after the increase in prices. It has forecasted that the industry's Ebitda per tonne will increase 3% year-on-year in FY22. CLSA expects that by FY24, the industry's profitability will be around 85% for a greenfield project to break even. CLSA expects cement demand to grow 10% year-on-year in FY22 on a low base in FY21.