Cement Manufacturers Shine Despite Price Challenges
In the June quarter, leading cement manufacturers in India reported single-digit volume growth despite facing challenges from declining cement prices. Leading companies like UltraTech, Ambuja Cements, ACC, Shree Cements, and Dalmia Bharat saw volume growth between 3% and 9%, along with enhanced capacity utilization. However, the overall revenue growth was subdued due to a persistent downtrend in cement prices and a slight rise in raw material costs, particularly fly ash and slag.
The all-India average cement price in June 2024 was approximately ₹348 per 50 kg bag, marking a 3% year-on-year decrease. This price was, however, higher than the ₹335 per bag recorded in May 2024. For the first two months of FY25, the average cement price stood at ₹340 per bag, down 8% compared to the previous year. In contrast, the average prices were ₹365 per bag in FY24 and ₹375 per bag in FY23. Additionally, construction activities slowed during April and May due to an intense heatwave and the general elections.
UltraTech Cement reported a consolidated net profit of ₹1,696.59 crore for the June quarter, with revenue from operations increasing by 1.87% to ₹18,069.56 crore. The company saw a 7% rise in volume sales, reaching 31.95 million tonnes. UltraTech also announced an open offer for India Cements Ltd after acquiring the promoter’s stake.
Ambuja Cements, a subsidiary of the Adani Group, announced a consolidated net profit of ₹789.63 crore, with operational revenue totaling ₹8,311.48 crore. The company’s consolidated sales volume, including its subsidiary ACC, rose by 2.6% to 15.8 million tonnes, marking the highest clinker and cement sales in the first quarter over the last five years. On a standalone basis, Ambuja Cements’ sales volume increased by 2.2% to 9.3 million tonnes.
ACC experienced a 22.46% decline in net profit to ₹361.40 crore, with revenue from operations slightly down to ₹5,154.89 crore. However, its sales volume for cement and clinker increased by 9% to 10.2 million tonnes, the highest in the past five years.
Shree Cement, backed by the Bangur family, experienced a 51.31% decline in consolidated net profit to ₹278.45 crore, although its operational revenue increased by 1.73% to ₹5,123.96 crore. The company’s total sales volume rose by 8%, from 8.92 million tonnes to 9.64 million tonnes, with premium products making up 7.6% of total trade sales. Meanwhile, Dalmia Bharat’s operational income slightly fell to ₹3,621 crore, but its sales volume grew by 6.2% year-on-year, reaching 7.4 million tonnes.
Some companies, like JK Lakshmi Cement, Birla Corporation, and India Cement, reported declines in volume. Birla Corporation’s sales by volume were 4.38 million tonnes, down from 4.41 million tonnes in the previous year, due to weak prices and sluggish demand. JK Lakshmi Cement’s sales volume fell to 2.32 million tonnes from 2.53 million tonnes. India Cements faced significant challenges with capacity utilization due to liquidity issues from previous losses.
Looking ahead, cement manufacturers are optimistic about improved demand driven by the housing and infrastructure sectors. With expectations of a normal monsoon and substantial investments in infrastructure and housing projects, the industry anticipates a positive outlook for demand growth.
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