Cement Sector - Prices Stable Across India Except For Marginal Increase In Central, East Regions: Nirmal Bang

Nirmal Bang Report

Cement production grew by 4-5% YoY in January 2023 despite a healthy base of last year, as per the data published by the Office of Economic Advisor. We expect Rs 5-10 price hike in the following week (March 10-16th) on the back of strong demand in Feb-23 (8-9% month-on-month)

North: Demand picked up in the city post an extended winter as labor availability increased after the Lohri festival. Due to the ongoing infrastructure projects, non-trade to trade ratio in Delhi NCR stands at 60:40.

West: Government projects along with retail spending supported demand, which was broadly steady. The Western region continued to witness a flattish trend, in-line with the pan India pricing trend.

South: South region witnessed a dip in prices by 5-10/bag. Tamil Nadu and Kerala markets are under stress as players are ready to sacrifice prices for volume. Chennai and Cochin witnessed a decline of Rs 10/bag in Feb-23 on month-on-month basis

East: Eastern region witnessed an increase of Rs 5/bag in Feb-23. Northeast (Assam plus seven sisters) and few local players (other than mini cement units) command a premium of at least Rs 30/bag over ‘A’ category brands based out of Northeast.

Central: Central region prices inched upwards by Rs 5-7/bag from the Jan-23 exit price. Trade:non-trade mix for the region hovers ~70:30. Uttar Pradesh is estimated to be the second largest market in the country after Maharashtra.

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