Indian real estate and infrastructure firms may heave a sigh of relief as their input costs come down with the cement companies slashing prices pan India even before the onset of monsoon.
Cement companies are trying to boost the tepid demand expected towards the end of the busy season.
Cement companies in the western region have cut prices by Rs. 10 to 15 per 50 kg bag while in the north & south, prices have corrected by Rs. 8 to 10 per 50 kg bag even before the onset of monsoon due to sluggish demand and oversupply situation in the market. In the eastern region prices continue to be stable.
Mrs. Vinita Singhania, MD J K Lakshmi Cement said,'' The demand in April month has gone absolutely haywire due to several reasons. While there is a shortage of labourers due to which there could be a slowdown in construction activities certain infrastructure projects have also not come to place. Prices have started falling due to these reasons. This year we are expecting growth of about 6 to 7% as compared to double digit increase in demand in the previous years ”
A study by tariff commission says that..
64% of demand for cement is driven by housing,
17% by infrastructure,
13% by institutional ,
6% by industrial and commercial.
A senior official in Ambuja Cement said, “Before the onset of monsoon labourers go back to their native places & construction activity slows down. Due to labour shortage construction activities has slowed down which may be the reason for decline in demand.”
The price correction comes as the sector has not seen demand grow as per expectations in the peak season this year.
Mr. Rajesh Kumar Ravi, Analyst,Karvy Stock Broking said, “At present, a 50 kg bag of cement costs about Rs. 290 to 300 and in the next 3 to 4 months it is expected to come down to about Rs. 260 to Rs. 270 as construction activities will slow down with the arrival of monsoon.”
Src: FC
Cement companies are trying to boost the tepid demand expected towards the end of the busy season.
Cement companies in the western region have cut prices by Rs. 10 to 15 per 50 kg bag while in the north & south, prices have corrected by Rs. 8 to 10 per 50 kg bag even before the onset of monsoon due to sluggish demand and oversupply situation in the market. In the eastern region prices continue to be stable.
Mrs. Vinita Singhania, MD J K Lakshmi Cement said,'' The demand in April month has gone absolutely haywire due to several reasons. While there is a shortage of labourers due to which there could be a slowdown in construction activities certain infrastructure projects have also not come to place. Prices have started falling due to these reasons. This year we are expecting growth of about 6 to 7% as compared to double digit increase in demand in the previous years ”
A study by tariff commission says that..
64% of demand for cement is driven by housing,
17% by infrastructure,
13% by institutional ,
6% by industrial and commercial.
A senior official in Ambuja Cement said, “Before the onset of monsoon labourers go back to their native places & construction activity slows down. Due to labour shortage construction activities has slowed down which may be the reason for decline in demand.”
The price correction comes as the sector has not seen demand grow as per expectations in the peak season this year.
Mr. Rajesh Kumar Ravi, Analyst,Karvy Stock Broking said, “At present, a 50 kg bag of cement costs about Rs. 290 to 300 and in the next 3 to 4 months it is expected to come down to about Rs. 260 to Rs. 270 as construction activities will slow down with the arrival of monsoon.”
Src: FC
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