UltraTech Cement, the country's largest cement company, on Monday warned high input and energy costs would squeeze margins going forward, after posting a 19% rise in its fiscal fourth-quarter profit.
UltraTech, with a capacity of 52 million tonne a year, reported net profit of Rs 867 crore for the March quarter, beating estimates on higher volumes. Net sales rose 18.8% over the same period to Rs 5,337 crore.
Demand for cement in India, the world's largest producer after China, is expected to rise 7-8% this year as lower interest rates help kickstart construction activity, analysts said, but rising costs would force companies to increase prices to protect margins.
Cement makers are also under pressure ahead of a ruling from the Competition Commission of India (CCI), an anti-trust body, expected this month, on whether companies have colluded to push prices higher.
While no companies have been named as yet, any positive findings could mean penalties for the companies.
"The cement industry is likely to grow over 8% linked to the government's focus on infrastructure development," UltraTech said in a statement.
Part of the diversified Aditya Birla Group, UltraTech competes with Holcim-controlled ACC and Ambuja Cement as well as Jaiprakash Associates in the Indian market.