Cement price likely to rise by Rs 15-20 per bag

Retail prices of cement is likely to rise again by another Rs 15-20 over the next few months and touch an all-time high of around Rs 400 per bag this fiscal, rating agency Crisil said on Thursday in a sector note.

The rise in price has been attributed to inputs commodity cost pressure such as coal and diesel supported by rising demand.

Crisil in its report said amid rise in price the earnings before interest, tax, depreciation, and amortisation (EBITA) of cement makers will decline by Rs 100-150 per tonne this fiscal because of high input costs.

The recent rally in prices of imported coal (up more than 120 per cent on-year in the first half) and petcoke (up 80 per cent) is likely to increase power and fuel costs by Rs 350-400 per tonne (up around 40 per cent on-year) this fiscal as a large part of the cost inflation is yet to be absorbed, the note stated.

Cement sales volume is expected to rise 11-13 per cent this fiscal, albeit on a low base. This will largely offset the impact of cost pressure on cash accruals and keep credit profiles stable, the agency said, analysing 17 cement companies, which have a volume market share of 75 per cent in India.

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