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Cement prices seem to have peaked in northern, central and eastern regions,
post the hikes of ~INR 5-10/bag taken after the budget. Our channel checks
in these regions suggest demand resistance at higher levels even as
companies have announced further price hike of INR 10/bag from mid-March.
Prices may however remain flat or witness marginal declines in the coming
few weeks. While prices in West could rise further, select states in South may
witness further hikes. At current levels, prices are higher by ~INR 5-40/bag
in trade and non-trade segments across regions against last month. Feedback
from dealers suggests improved demand in South and West, but sluggishness
in North, Central and East compared with previous month.
All-India February 2011 despatches up 9.8% Y-o-Y
All-India cement despatches, at 18.4 mn tonnes, grew 9.8% Y-o-Y on a low
base of February 2010, but were flat M-o-M. Aggregate despatches of seven
major players (comprising ~55% of overall industry despatches) jumped 11.2%
Y-o-Y for February 2011, but declined 1.3% M-o-M.
Region-wise summary
We surveyed 29 cities across India to get a region-wise trend of demand and
prices in both trade and non-trade categories. Key highlights are as below:
North: Prices seem to have reached a peak
Including the hike of ~INR 5-10/bag post budget, current prices are higher by
~INR 10-40/bag in both, trade and non-trade segments against previous
month. Price hike of another INR 10/bag across regions is announced from mid-
March, but the feedback suggests it is unlikely to go through, since demand is
likely to weaken in the third week due to non-availability of labour due to Holi
and resistance in trade market at high prices. Though in small quantities,
companies have resumed supplies in the non-trade category in NCR region at
prices lower by INR 10-15/ bag compared with the trade segment. Demand in
Punjab remains muted despite government lifting the ban on sand mining.
East: Further price hike in March unlikely
Demand in March is flat compared with last month. Including the hike of ~INR
10/bag post budget, current prices are higher by ~INR 10-40/bag. Though price
hike of INR 10/bag has already been announced, it is unlikely to go through
across region. Supplies in the non-trade segment remained low.
South: Demand improves over last month
Dealers convey improved demand against February 2011 and expect it to gain
pace. Demand in Bangalore has taken a knock in the past few days as
government has banned aggregate crushers from operating within 60 km
vicinity of the city. Favourable outcome is expected in the coming days.
Including the hike of ~INR 5-10/bag post budget, current prices are higher by
~INR 5-30/bag in the region. Prices are likely to increase further in Andhra
Pradesh and Tamil Nadu.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cement prices seem to have peaked in northern, central and eastern regions,
post the hikes of ~INR 5-10/bag taken after the budget. Our channel checks
in these regions suggest demand resistance at higher levels even as
companies have announced further price hike of INR 10/bag from mid-March.
Prices may however remain flat or witness marginal declines in the coming
few weeks. While prices in West could rise further, select states in South may
witness further hikes. At current levels, prices are higher by ~INR 5-40/bag
in trade and non-trade segments across regions against last month. Feedback
from dealers suggests improved demand in South and West, but sluggishness
in North, Central and East compared with previous month.
All-India February 2011 despatches up 9.8% Y-o-Y
All-India cement despatches, at 18.4 mn tonnes, grew 9.8% Y-o-Y on a low
base of February 2010, but were flat M-o-M. Aggregate despatches of seven
major players (comprising ~55% of overall industry despatches) jumped 11.2%
Y-o-Y for February 2011, but declined 1.3% M-o-M.
Region-wise summary
We surveyed 29 cities across India to get a region-wise trend of demand and
prices in both trade and non-trade categories. Key highlights are as below:
North: Prices seem to have reached a peak
Including the hike of ~INR 5-10/bag post budget, current prices are higher by
~INR 10-40/bag in both, trade and non-trade segments against previous
month. Price hike of another INR 10/bag across regions is announced from mid-
March, but the feedback suggests it is unlikely to go through, since demand is
likely to weaken in the third week due to non-availability of labour due to Holi
and resistance in trade market at high prices. Though in small quantities,
companies have resumed supplies in the non-trade category in NCR region at
prices lower by INR 10-15/ bag compared with the trade segment. Demand in
Punjab remains muted despite government lifting the ban on sand mining.
East: Further price hike in March unlikely
Demand in March is flat compared with last month. Including the hike of ~INR
10/bag post budget, current prices are higher by ~INR 10-40/bag. Though price
hike of INR 10/bag has already been announced, it is unlikely to go through
across region. Supplies in the non-trade segment remained low.
South: Demand improves over last month
Dealers convey improved demand against February 2011 and expect it to gain
pace. Demand in Bangalore has taken a knock in the past few days as
government has banned aggregate crushers from operating within 60 km
vicinity of the city. Favourable outcome is expected in the coming days.
Including the hike of ~INR 5-10/bag post budget, current prices are higher by
~INR 5-30/bag in the region. Prices are likely to increase further in Andhra
Pradesh and Tamil Nadu.
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