Informist, Thursday, Jul 4, 2024
--Dealers: Cement cos cut prices by 10-15 rupees/50 kg in Andhra
--Dealers: Cement cos cut prices by 10-15 rupees/50 kg in Telangana
--Dealers: Cement cos cut prices in Andhra, Telangana on weak demand
--Dealers: UltraTech, India Cements, Ramco Cements cut prices
--Dealers: ACC, JK Lakshmi, NCL Ind, Dalmia Bharat cut cement prices
--Dealers: Orient Cement, Sagar Cements, KCP cut prices
By Narayana Krishna
HYDERABAD - Cement companies with significant presence in Telangana and Andhra Pradesh have cut prices by 10-15 rupees per 50-kg bag with immediate effect, dealers told Informist. Recent Assembly elections in both states and slower construction activity during the monsoon have led to subdued demand for the commodity, they said.
Companies such as UltraTech Cement, Orient Cement, KCP, India Cements, Sagar Cements, Shree Cement, Ramco Cements, JK Lakshmi Cement, and NCL Industries, along with several others, have announced a price cut, dealers said.
With this, the average price of a 50-kg cement bag in both states is 260-310 rupees compared to 270-325 rupees earlier, depending on the location, dealers said. While demand in both states is lower than expected, excessive supply has led to massive competition and price cuts, a Hyderabad-based dealer said. In recent months, real estate activity in Hyderabad has slowed due to elections, and construction has also been impacted by heatwaves and a shortage of sand, the dealer said.
After an attempt to raise cement prices in April, companies struggled to maintain pricing as competition was high, and large players focused more on improving volumes rather than maintaining prices at higher levels, said a senior official of a Hyderabad-based cement manufacturing company. Besides consolidation in the form of acquisitions, several cement companies increased capacity, resulting in excessive supply and stiff competition, the official said.
Dealers don't expect any upward price momentum this month due to seasonality. In its Jan-Mar earnings call, Dalmia Bharat said cement prices are likely to be soft till September. Some companies, however, hope for an improvement in cement sales in Andhra Pradesh, as the new government is likely to offer free sand for individual house construction in the state as part of its poll promises.
At 1035 IST, shares of UltraTech Cement were at 11,754.70 rupees on the National Stock Exchange, down 1% from the previous close, while shares of ACC were down 1.8% at 2,715.95 rupees. Shares of Dalmia Bharat were down 0.7% at 1,841.15 rupees, and India Cements were down 2.3% at 281 rupees. End
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