Pressure on cement companies amid price recovery delay due to higher supply

Analysts cautious on sector given the inadequate profit triggers

Recovery in cement realisations continues to elude the sector, even in December, with hopes of a meaningful improvement now carried forward to 2019. While there was optimism that cement prices may recover at the end of the festive season (Dussehra and Diwali), this was not the case as there was no improvement in prices for the fifth month in a row.  

The reason for the pressure on prices is higher supply — driven by cement majors trying to gain market share, ongoing brownfield expansions, and increasing utilisation of acquired capacities. On a regional basis, while South India has a higher proportion