Cement prices improve in January
After a short fall in the last December cement prices recovered and improved in January throughout India. However, Delhi, Bangalore and Hyderabad were exceptions to the increase with prices stagnating in Delhi and Bangalore and declining in Hyderabad.
Demand on the other hand remained weak in almost all the regions. The stagnating demand defies the analysts' expectation of improving demand. Companies have expected the demand situation to improve in the current year starting January. In the event of continuing weak demand and oversupply situation, companies may find it difficult to raise prices in the coming months.
Companies such as Ultratech Cement, Sagar Cement and Shree Cement have reported a contraction in the operating profit margins yoy in the December quarter results. Weak demand and lower realisations have been the reasons for the declines.