Better realisations as prices increase, India

Better realisations as prices increase, India
16 May 2011


Cement majors including ACC, Ambuja Cements and UltraTech Cement have benefited from an increase in cement prices across the region during the Jan-March quarter of FY10-11, reporting a YoY growth in realisation during the period

ACC, in which Holcim holds a 50.02% stake, reported a 3% YoYand 1% QoQ growth in realisation as pricing discipline improved during the quarter and cement majors could pass on part of the cost increase. ACC’s realisation during the quarter stood at INR3893/t compared to INR3,767/t in the same period last year. Similarly, Holcim Group’s other Indian unit Ambuja Cement also reported a 4% YoY and 10% QoQ growth in cement realisation to INR3913/t.

Aditya Birla Group’s UltraTech cement saw its combined realisation (grey cement, clinker and white cement) increase 20% YoY and 14% QoQ as cement prices rose.  An IIFL report said: "Prices rose sharply particularly in South, which accounts for about 25% of UltraTech’s volumes. Cement prices have started declining in most regions in the past month. Prices in key southern markets continue to be high given the strong pricing discipline at present. However, it would be difficult to sustain."

Meanwhile, margins of cement players continue to decline on account of rising input cost.  "Power and fuel expenses of ACC are expected to rise from the next quarter as Coal India has increased linkage coal prices by 30% from March onwards," said J Radhakrishnan, an analyst with IIFL in his report.
Published under Cement News