Price hikes may not stall cement companies' profit dip: CareEdge

Operating profit margins likely to contract by 320-380 basis points to 16.3-16.8 per cent in FY23, says CareEdge Ratings, as input cost pressures remain

Price hikes of 3-4 per cent by cement companies over the coming months may not be enough to cushion the impact of high input costs this financial year, ratings agency CareEdge (formerly Care Ratings) said on Monday. The agency said operating profit margins of cement companies will likely contract by 320-380 basis points to 16.3-16.8 per cent in FY23 versus the previous year, despite demand firming across sectors. 

This will be the second straight year, said CareEdge, when operating profit margins of cement companies will contract sharply. In FY22, it had fallen by 430 basis points to levels of about