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Cement prices fell across regions in July 2024, squeezing industry margins, with demand expected to recover only in the latter half of FY25.
Although price hikes may not be sustainable in the near term due to the onset of the monsoon season in a few weeks, MOFSL believes that the government's focus on slum redevelopment and affordable housing under the PMAY will support long-term cement demand.
Input cost pressures have been a threat to profitability of cement firms for the past few quarters
A similar decline in prices post demonetisation was witnessed in the western markets wherein the price, after having recovered by Rs 15/bag in October to Rs 265/bag, slipped to Rs 240/bag in November 2016.
Cement price has also fell. But Arora says the prices are very volatile and will bounce back soon. Only after December end can we understand where the prices may settle.
While wholesale segment sales remain the same, retail sales have slumped by 25-30 percent post the cash ban, says Shah. But retail only accounts for 15 percent of total cement sales.
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