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India’s cement companies may finally have to increase prices after facing nearly ₹300 per tonne of cost inflation over the last few months, according to Rajesh Ravi, Institutional Research Analyst at HDFC Securities.
Ravi said cement makers have so far avoided major price hikes even as input and logistics costs continue to rise sharply. “Cement is the only building material product which hasn't seen any relevant price increase,” he said. He added that the industry now needs to “absorb a higher cement price rather than just chasing volumes.”
The comments come at a time when several cement companies are shifting focus from aggressive expansion to protecting profitability. Rising freight, fuel, and raw material costs are putting pressure on margins across the sector.
One major development in the industry is Dalmia Bharat from the Adani Group. Ravi said the deal is strategically positive for Ambuja Cements because it strengthens the company’s presence in Central India and supports its ambition of becoming a pan-India player.
“Dalmia needed this asset,” Ravi said, adding that the company already has distribution reach in the region and can “ramp up these assets fairly fast.”
Also Watch | UltraTech, Ambuja, JK Cement in spotlight: What’s driving these stocks higher
However, Ravi also warned that the acquisition could increase competition in the Central India market as more capacities become operational over the next few quarters. That could keep pressure on industry margins even if demand remains healthy.
Watch the full conversation here
On the Adani Group’s decision to sell the assets instead of retaining them for Ambuja Cements, Ravi said the move appears financially prudent in the near term. According to him, the group is currently focusing more on improving margins and managing debt rather than adding fresh capacity.
“We believe that the industry is looking at almost ₹300 per tonne of cost inflation,” Ravi said, pointing out that logistics costs alone may rise by another ₹20-25 per tonne.
Catch all the latest updates from the stock market here
Ravi said cement makers have so far avoided major price hikes even as input and logistics costs continue to rise sharply. “Cement is the only building material product which hasn't seen any relevant price increase,” he said. He added that the industry now needs to “absorb a higher cement price rather than just chasing volumes.”
The comments come at a time when several cement companies are shifting focus from aggressive expansion to protecting profitability. Rising freight, fuel, and raw material costs are putting pressure on margins across the sector.
One major development in the industry is Dalmia Bharat from the Adani Group. Ravi said the deal is strategically positive for Ambuja Cements because it strengthens the company’s presence in Central India and supports its ambition of becoming a pan-India player.
“Dalmia needed this asset,” Ravi said, adding that the company already has distribution reach in the region and can “ramp up these assets fairly fast.”
Also Watch | UltraTech, Ambuja, JK Cement in spotlight: What’s driving these stocks higher
However, Ravi also warned that the acquisition could increase competition in the Central India market as more capacities become operational over the next few quarters. That could keep pressure on industry margins even if demand remains healthy.
Watch the full conversation here
On the Adani Group’s decision to sell the assets instead of retaining them for Ambuja Cements, Ravi said the move appears financially prudent in the near term. According to him, the group is currently focusing more on improving margins and managing debt rather than adding fresh capacity.
“We believe that the industry is looking at almost ₹300 per tonne of cost inflation,” Ravi said, pointing out that logistics costs alone may rise by another ₹20-25 per tonne.
Catch all the latest updates from the stock market here
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