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Cement realisations of major companies fall by 1.8-2% in the December 2015 quarter

ET Intelligence Group: Cement realisations of major cement companies fell by 1.8­2% in the December 2015 quarter on a quarter on comparison points out research of domestic brokerages. Weak cement demand and sharp focus of cement companies which can afford to take cut in cement prices due to low cost of cement production have impacted cement realisations in the December quarter.

Companies in southern region recorded a healthy growth in realisation despite subdued demand. Eastern and central regions showed a massive decline in prices. Cement prices in northern region also remained weak. "The divergence in cement prices remained wide, even though demand in southern region was weak," points out research by domestic brokerage Nirmal Bang.

As cement prices fell, cement companies focussed on volumes. Due to this, aggregate cement volumes grew by 4.7% on a year on year basis. Going ahead, cement demand is expected to improve in the second half of the next fiscal. However, only a few companies which have advantage of low cost of cement production would benefit. These are Ultratech Cement and Shree Cement.

Source: Economic Times