Cement sales rise 7.23% in February

The cement industry, which has been reeling under low-demand scenario, received some relief in February. The industry witnessed a growth of 7.23 per cent in sales during the month.

The total despatches stood at 18.39 million tonnes against 17.15 million tonnes in the same month last year. Besides, production of the building material too was up 6.46 per cent at 18.45 million tonnes compared with 17.33 million tonnes in the previous corresponding month.

In recent months, sales were either marginally up or flat. But as the peak season has set in, the seasonal demand has started pushing sales figures on the upside.

The three domestic majors — ACC, Ambuja and UltraTech Cement — came up with positive growth in their sales number in February. ACC, however, showed a robust growth of 17 per cent year-on-year mainly on account of its low base in the previous year, while Ambuja and UltraTech managed a growth of 4-5 per cent.

However, despite a slightly better performance in February, industry's growth so far in the current financial year is less than 6 per cent, which is nowhere near the expectations of 10 per cent.

Cement companies have been raising prices incessantly since November. And the last two months have seen an increase of over Rs 40 for a bag of 50 kg cement taking the all-India average price to Rs 265 from Rs 225 seen in December.

However, input costs rise has also brought companies under pressure. Due to which, cement analysts said, despite rise in prices coupled with volume growth, makers' margins in the March quarter would take a hit of 300-400 basis points year-on-year.