Cement Channel Check - North and Central yet to warm up; monthly update ::Edelweiss (pdf link)

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Cement prices in the North remained nearly flat compared to those on January 6, 2012, with certain pockets even feeling downward pressure on back of low demand and continued supply. Hikes in the Central region remained modest with elections impacting demand in UP. Price hike momentum is expected to gather pace in March 2012. However, prices in the East, West and South continued the uptrend with select cities in Gujarat and Maharashtra posting new peaks; we expect prices to remain firm in these regions in the near term.        

January despatches up 10.3% YoY due to low base

Industry despatches for January 2012 at 20.42mt surged 10.3% YoY due to a low base (last year, January despatches were up just 1.7% YoY). MoM, despatches rose 3.2%. YTD, FY12 industry despatch growth now stands at 6.2% YoY.

·       Region-wise summary

        We surveyed 29 cities across India to get a region-wise demand and price trend in both trade and non-trade categories. Key highlights are as follows:   

     

North: Mixed bag

Cement price trend has been a mixed bag in the North. While prices were on an uptick in Gurgaon, they were under pressure in Rajasthan (Jodhpur, Jaipur and Sri Ganganagar) due to low demand and continued supply. Demand in Punjab remained subdued due to state elections, leading to a near flat price trend. Prices remained flat even in the Delhi market.

  

East: Marginal uptick in demand

Prices in the region have increased by ~INR5-20/bag on back of marginal uptick in demand. Dealers expect further hike in prices in coming weeks. 

South: Demand yet to pick up

Though demand is yet to pick up post Pongal festival, prices remained at elated levels, having risen by ~INR5-15/bag. Prices are expected to remain flat over coming weeks.

West:  The uptick continues

With an improving demand trend, cement prices have increased further by ~INR5-31/bag. Nasik registered a price hike of ~INR35-40/bag in the trade segment and of ~INR45-50/bag in the non-trade segment due to supply shortage.

Central India: Election pangs in UP

With demand subdued in UP due to state elections, prices have seen a modest hike of INR 5-10/bag over the month. Price hikes are expected to gather pace only post elections. Prices are nearly flat in Indore while they have seen an uptick in Bhopal.

LINK for report:

Cement Channel Check – North and Central yet to warm up; monthly update