Cement companies may revisit pricing strategy after June

There has been no definite industry call on the matter, but, the companies Business Standard spoke to declined to comment on prices saying "the situation is uncertain and anything can happen."

A month ago, several cement firms had taken a non-uniform stand on pricing, after being pressurised by the government. Some opted for freezing rates at the current levels, whereas others went ahead with cuts of Rs 2-7 on a 50 kg bag of cement.

So far, the government has not taken any measures on the industry's demands, which include reducing excise duties, abatement on cement and removing import duty on coal - the major contributor to the firms' input cost concerns.

Sumit Banerjee, managing director, ACC - the country's largest cement maker, recently said that after two-three months, the company would look at the scenario and decide about the prices. The company had chosen in May to freeze the prices for the period. However, it had added that this would erode margins.

At around the same time, Rajasthan-based major, Shree Cement, was one of the companies, which slashed prices by Rs 2-7 a bag in the central part of the country and Gujarat.

Puneet Dalmia, managing director, Dalmia Cement, had said last week, "In a rising input cost scenario, the industry has not been able to pass on the increased prices to the consumers. Post June, we will revisit the pricing strategy."

On an average, the cost pressure on a bag of cement has risen by Rs 14 in the last year. However, the actual rate increase has been in the range of Rs 5-8 a bag.

Currently, the average prices across the country is around Rs 220-230 a bag of cement. In Mumbai, it is Rs 255, Delhi Rs 235, Kolkata Rs 240, Chennai Rs 255 and Hyderabad Rs 216.