Cement sales improved by 6 per cent to 17.97 million tonnes (mt) in March against 16.93 mt in the same period last year. Production was up 5 per cent at 17.91 mt (17.03 mt), according to Cement Manufacturers' Association.

In the past financial year, cement companies sales were up 7 per cent to 179 mt (168 mt). Production rose 6 per cent at 180 mt (169 mt) in the fiscal.

The all-India sales number will increase by 4.52 mt in March if the performance of Holcim group companies, ACC and Ambuja Cement, are included. They produced 4.49 mt in March. Both these companies are not part of the Association.

Cement demand across the country was down in the first three quarters of the last fiscal due to poor demand from infrastructure and real-estate companies. High borrowing cost and slowdown in the economy had brought down cement demand. However, there was a turnaround in demand since January with the Union Government reviving its investment in infrastructure development.

“We have a positive outlook on the cement sector led by prospects of higher realisation and improvement in demand. Fresh cement capacity addition is also expected to slowdown leading to better capacity utilisation,” said Mr Basanth Patil, Research Analyst, Dalmia Securities.

With improvement in demand, cement companies have hiked prices since January to pass on the increasing raw material and freight costs. Companies will be able to maintain operating margins at the current levels, he said.

In March, the average cement price was Rs 300 a bag, an increase of Rs 5-8 a bag. This was due to rise in excise duty in the Budget. The next few quarters will be crucial for the positive trend in the industry to continue, said Mr Patil.

>suresh@thehindu.co.in

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