Cement: Price hike insufficient to drive profitability

The price increase, which comes after six months of decline, should only help pass on cost pressures

Domestic cement demand has remained absent for the most part of FY18 so far. As the first half of FY18 bore the impact of goods and services tax (GST) related adjustments, the sand mining issues, labour shortages in some states and implementation of the Real Estate Regulatory Authority (RERA) Bill slowing down construction activities, all led to lower-than-expected cement demand. With all this, ICRA now expects a rebound in cement demand from the March 2018 quarter as against earlier expectations of December quarter, and consequently pegs cement demand to register a one per cent growth for the entire fiscal.

Although