North India prices of cement declined in March
All India prices of cement remained steady at ?334 per bag during March despite increases in southern and eastern regions, according to a report by Kotak Institutional Equities. South and eastern regions witnessed a price hike of ?5 per bag while prices declined by ?1-11 per bag in north, central and west. Since January, cement prices in the south had increased by ?45 per bag. “Prices in south are at ?30-50/bag premium to other regions despite lowest plant utilisation among all regions. Higher prices will aid near-term earnings for companies with large south and west presence such as ACC, UltraTech (among pan-India) and Dalmia Bharat, India Cements and Orient Cement. We maintain our cautious stance on the sector on expensive valuations,” Kotak said. “Based on the current price trend, we estimate the fourth quarter realisations for cement companies to increase by 2-3% quarter-on-quarter. Price increases will be higher for companies with large exposure in south,” it said. Prices were steady in Rajasthan but declined by ?5-10 per bag in Haryana, Himachal Pradesh and Delhi. In Gujarat, prices declined by almost ?15 per bag while they rose by ?5-10 per bag in Maharashtra. Prices also decreased by ?5 per bag in the north eastern states. “We note that after recent increase, south prices are at premium of ?30-50/bag to other regions. But, south markets still have the lowest plant utilisations across all regions,” Kotak noted in the report.
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