Realisation for cement firms may rise
Analysts expect realisations for cement companies to rise going forward as there are no major cost increases expected in the near future.
Analysts expect demand for cement to improve going forward and this may give companies room to raise prices if input cost spike going forward.
Already in the June quarter, cement companies have managed to pass on the increase in operational costs and register better realisations. This was on the back of improved demand, especially in the eastern region, including West Bengal, Chhattisgarh, Bihar and Jharkhand.
Realisations in the eastern states were the highest owing to a sharp rise in prices amid supply constraints. Production in the region was affected by erratic power supply and temporary shutdown of a large grinding unit.
Coal prices have dropped to $94 a tonne in the June quarter from $121 a tonne in the same period last year. Most companies have made a huge saving even as the rupee depreciated 21 per cent to 54/$ from 44.7/$ in the June quarter last year.