Cement Firms Plan To Slash Discounts

Leading cement companies are set to roll back the hefty discounts that were announced during the festive month in Maharashtra, following which cement prices will jump by almost 10 per cent to Rs 170 per bag.

Prices had been stagnant at around Rs 155 per bag due to a decline in construction activity during the last few weeks.

To boost sales during the festival season in Maharashtra, cement companies had announced major discounts in October.

However, demand was beginning to pick up, justifying the rollback in discounts, analysts said. Cement dealers said almost all cement majors were expected to hike prices from Thursday to around Rs 170 per bag.

Major beneficiaries of the price roll back would be cement majors such as Larsen & Toubro and Gujarat Ambuja Cements. The two companies dominate the market in Maharashtra. Company executives were not available for comments.

Analysts expect falling interest rates to enhance demand from the housing and construction sectors in the coming weeks.

They expect cement demand to grow by 8.5 per cent in the second half of the current fiscal, on the back of availability of low-cost housing loans and improved agricultural income.

Cement companies are also expecting the government to offer some incentives to the housing sector in the next budget.

The current firm trend in likely to continue in the next couple of months, the analysts added.