IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, in a recent report on the Cement sector said that barring the west, demand was sluggish in other regions. Prices had increased by Rs.15-25 per bag in the western region over the last three weeks on robust demand.
More price increases are indicated by producers in Gujarat, dealers said.
Seasonal discounts of Rs.5-10 per bag have commenced in a few markets in north and central regions and in Tamil Nadu over the last one week, the report said. However, prices continue to be higher MoM. Dealers in north and central regions expect prices to decline until end-December.
The report stated that demand is sluggish in all regions except the west. Labour shortage is cited as a major reason for sluggishness in construction activities. Cement demand in Bengaluru was negatively impacted owing to the sand truckers strike for over 20 days which affected construction.
Moreover, construction in Andhra Pradesh continued to be negatively impacted owing to the ongoing Telangana agitations.
“We expect all-India average cement prices to marginally decline sequentially until end-December; however, prices are likely to be strong YoY,” IIFL said.
The report was published by IIFL’s Institutional Equities Research desk.