Cement gross sales in India over the last quarter are estimated to have grown by 11-12 per cent in comparison with final 12 months. Nonetheless, this double-digit progress was inconsistently distributed amongst cement producers, with some main gamers reporting single-digit progress.
For a lot of cement makers, cement quantity progress has been affected by causes corresponding to floods, failed pricing methods and, in some instances, lack of working capital.
Meren Lodha, Analysis Director at CRISIL Market Intelligence and Analytics, estimates robust year-on-year demand progress of 11-12 per cent for the quarter ending September 2023 (Q2FY24). “With demand firing on all cylinders, primarily on account of elevated development actions amid the drier monsoon season and better authorities spending forward of the Lok Sabha elections,” he mentioned.
Among the many main cement makers, people who managed to outperform the business progress numbers within the quarter are UltraTech Cement, JK Lakshmi and Heidelberg Cement, registering progress above 12 per cent.
Among the many prime producers, ACC-Ambuja Cements and Dalmia Cement noticed single-digit progress of two per cent and 6.6 per cent, respectively.
In a name with analysts on Q2 FY24 earnings, ACC-Ambuja Cements’ prime administration attributed the weak progress to floods in some north Indian markets. “We didn’t have an excellent July. A good portion of our capability in Himachal was severely submerged. It had some influence on the availability chain in July. We additionally witnessed very heavy monsoon rains in central India,” the senior executives mentioned, including These two markets are very massive for ACC and Ambuja collectively.
“The Japanese area was adversely affected by heavy rains in September, resulting in single-digit progress within the area in the course of the quarter. There have been additionally important value will increase within the area, which added to the expansion quantity,” CRISIL’s Lodha defined.
Dalmia Cement, the dominant participant within the East India market, attributed its decrease progress volumes to the persevering with influence of the failed technique tried within the quarter ended June 2023. “We’ve got taken some pricing choices within the East which we consider didn’t work out as we had deliberate,” mentioned Punit Dalmia. “We’ve got already made corrections and I believe we’ll begin seeing the outcomes of that from This autumn onwards,” Dalmia Cement MD and CEO, in a post-earnings name with analysts.
For others, like Indian Cement, quantity progress has taken a success on account of working capital considerations. The corporate recorded a 5 % enhance in its gross sales throughout this quarter in comparison with final 12 months. The corporate’s senior administration instructed analysts that progress would have been larger if that they had higher working capital.
(Tags for translation)Cement