Major cement manufacturers reported a decline in margins in the September quarter, mainly on account of lower prices, leading to lower sales realisation.
Barring three leading producers — UltraTech Cement, Ambuja Cement, and Dalmia Bharat — smaller players, including Nuvoco Vistas Corp, JK Cement, Birla Corporation and Heidelberg, reported a decline in topline and sales volume in the second quarter of the current fiscal year.
Industry observers said the increase in sales volume of UltraTech and Ambuja Cements is mainly due to the several acquisitions by both companies that consolidated their position further in the industry.
The industry also faced challenges such as extended monsoon, floods and a slow pickup in government demand, cumulatively leading towards a weak demand.
Power, fuel and other costs, however, largely remained stable for the industry.
The all-India average cement price was around ₹348 per 50 kg bag in June 2024. It decreased 11 per cent year-on-year to ₹330 per bag in September, though it increased 2 per cent on a month-on-month basis.
In the first half of FY25, cement prices declined 10 per cent year-on-year to ₹330 per bag. A year earlier, the average prices stood at ₹365 per bag and ₹375 per bag in FY23, according to an Icra report.
Leading cement maker Ultratech reported a 68 per cent capacity utilisation with a 3 per cent growth in volume terms. However, its sales realisation for grey cement declined 8.4 per cent year-on-year (YoY) and 2.9 per cent quarter-on-quarter (QoQ), in the July-September period.
“August to September, we saw improvement in prices and from September to October also, the prices have been steady. So we have seen an improvement from ₹347 (in August) exit to about ₹354 currently,” UltraTech CFO Atul Daga said.
Ambuja Cements, the country's second-largest cement maker, reported a growth of 9 per cent in sales volume at 14.2 million tonnes in the September quarter. However, its earnings before interest, taxes, depreciation, and amortisation (EBITDA) was 15 per cent lower at ₹1,074 crore.
The Adani Group firm had a higher margin in the September quarter on an annual basis, though, it had a "lower margin" than June quarter "mainly due to industry-wise lower price realisation".
PTI
