Brokerage firm Elara Securities (India) has said it does not expect Indian cement prices to rise significantly in the current fiscal due to sluggish demand.
Historically, the cement industry has gained pricing power only when capacity utilisation surpasses 85 per cent. Thus, the firm expects pan-Indian cement prices to increase only by 1.7 per cent to 3.3 per cent on an average over FY11. The brokerage firm expects capacity utilization to be 75-82 per cent in FY12.
As a result, cement companies would not be in a position to set prices and would face some margin pressures, Elara Securities said. The South was likely to witness the least price increases of up to two per cent, while Central India may see price rises in the range of 3-4 per cent, it said.