Cement manufacturers are set to hike prices by around Rs 20 per a 50 kg bag from Friday (Oct. 1, 2010) in Gujarat and a similar hike is being contemplated for Maharashtra including the key market of Mumbai. The likely price hike is to cash in on the likely increase in demand following the monsoon season.
Though the cement prices in the domestic market, particularly in the southern, western and central regions, have witnessed a series of price hikes in the monsoon season, brokerage house Sharekhan believes that the same are unlikely to be absorbed by the market as the recent price hikes are not supported by volume growth.
Though the cement prices in the domestic market, particularly in the southern, western and central regions, have witnessed a series of price hikes in the monsoon season, brokerage house Sharekhan believes that the same are unlikely to be absorbed by the market as the recent price hikes are not supported by volume growth.
Rather, it notes that the price hikes have come on the back of control of supplies through a cut down in production by cement manufacturing companies. Hence, it continues to expect average realisations of cement companies for FY2011 to be lower than the average realisations of FY2010.
Region wise expected price hike by Cement Companies:
Region wise expected price hike by Cement Companies:
Cement prices in a few major cities of Gujarat like Baroda, Surat, Ahmedabad and Mehsana are likely to increase by Rs 20-25 for each bag and the revised average price would be around Rs195-200 for each bag.
Cement prices in Mumbai and other cities of Maharashtra have increased by Rs 10 per bag in the week ago period and the present average price is Rs 240 for each bag. In addition to this, the companies have intimated for another round of price hike in a couple of days, which will increase the average price in the Mumbai region to Rs 250-255 for each bag.
In Hyderabad and Chennai cement prices are expected to increase by Rs 20-30 for each bag in a week`s time and the proposed average price will be Rs 190 and Rs 275 for each bag respectively.
Cement prices in Mumbai and other cities of Maharashtra have increased by Rs 10 per bag in the week ago period and the present average price is Rs 240 for each bag. In addition to this, the companies have intimated for another round of price hike in a couple of days, which will increase the average price in the Mumbai region to Rs 250-255 for each bag.
In Hyderabad and Chennai cement prices are expected to increase by Rs 20-30 for each bag in a week`s time and the proposed average price will be Rs 190 and Rs 275 for each bag respectively.
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