The reduction in diesel and imported coal prices, coupled with good demand and price rise, are expected to result in better margins for the cement industry in the fourth quarter of FY09, say experts.
Soaring input costs, especially of power and fuel, resulted in a fall in cement companies’ margins in India, which was evident in the 3Q results. Players like Grasim, UltraTech, Ambuja Cement, ACC Ltd and Binani, among others, reported de-growth in their bottomline citing high input cost.
Grasim Industries Ltd, while announcing its 3Q results, said, “Though realisations improved, the impact was more than offset by soaring input costs, thereby affecting margins adversely.”
Experts note that the recent reduction in diesel and imported coal prices will benefit cement makers in the fourth quarter, compared to the two earlier quarters.