Rising input costs, including fluctuating imported coal prices and crude, and expectations of improving demand saw cement makers hike prices in April by ₹45 -50 /bag, which was a 12 per cent month-on-month hike.

This is amongst the steepest hike in cement prices since January , trade sources said.

Region-wise, in the north Indian markets the increase was over ₹50 /bag (14 per cent m-o-m) or up at ₹431/ bag.

The southern markets saw an 8–10 per cent rise in April at about ₹30 per bag. Prices are around ₹392 -400/bag (over March price of ₹362–370/bag).

In the west, cement prices were up ₹45-50/ bag, (approximately 12 per cent) m-o-m, to ₹423/bag. In central India, the hike was to the tune of 11 per cent m-o-m, or up by around ₹40/bag to ₹421 per bag in April.

The eastern market saw a price hike of 13-14 per cent m-o-m, at ₹384 per bag.

“Just like petrol and diesel, cement price has increased on a daily basis (frequency of ₹5-10) in April. Due to the price hike, demand has been weak. But demand is likely to rebound in the coming months,” IDBI Capital said in a report.

Cement demand is expected to grow 10 – 12 per cent in FY23.

Rise in cost of production

According to a cement major, input cost rise has led to an increase in cost of production by at least ₹60 -70 per bag.

The average imported coal price has remained volatile, as in the last few days it has again increased above $300/tonne (6,000 kcal).

“Cement price hike in April is done to counter fuel inflation, but based on spot imported coal prices, we understand cement companies need further hike of 3-5 per cent to maintain Dec-21 quarter EBITDA margins,” the report said.

Analysts say the impact of rise in coal and petcoke prices will have a lag effect and it will start reflecting in the coming quarters.

ACC, which declared results for the Jan - Mar quarter, saw the input cost pressure take a toll on its EBITDA margin. Margin shrunk over 600 basis points y-o-y. The cement major’s EBITDA margin was at 14.3 per cent (lower than 20 per cent ). Its blended EBITDA was down 24 per cent y-o-y.