Concrete

Cement price rise has impacted our profitability

Published

3 years ago

January 16, 2023

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Ketan Patel, Director, Akshar Group, speaks about striking a balance between losses incurred and foreseeable profits, even as the real estate sector battles with rising prices of cement and other raw materials.

How is the current real estate market and how are your projects performing?
The market has opened up. We are expecting a good demand in real estate and are looking for it to lower down in the next two-three years. When we look at the statistics of the buyer, registrations, launches etc., of a quarter, if we try to neutralise the cement, then it comes across as more area- and demand-centric. In metro cities like Mumbai or Bangalore, real estate has to do well because of the demand
for it. More than demand, it is also about migration and work opportunities. As a result an entire ecosystem develops around it, which leads to demand and purchase.
I believe that we are building an asset, but then it comes down to what price point you have entered at, what specifications you are offering, if the zone has the typology requirement – all factors need to be kept in mind to understand the price and demand of that location. Sometimes, a single development from a particular brand and what they are offering changes the demand in a zone. Price, at the end of the day, is a prime factor and this market is centred around it.

Has the cost rise in cement and concrete building materials impacted your profitability?
Yes. Cement price rise has impacted our profitability, making it lower and, in some cases, it has led us to incur some losses, too. For the ongoing projects, where about 60 per cent to 80 per cent of the units are sold, we cannot now go to the buyer and tell them that the cost of raw materials has gone up and the remaining units, of which the construction was pending will be at a higher price. So, that is where we are incurring a low profit or loss per say.
I believe the cost of raw material has impacted on-going projects but for the new projects we are prepared that now the prices have gone up so we must have a 20 to 25 per cent buffer for that.

Are you expecting a change in consumer behaviour as the price of real estate will go up owing to the rise in the cost of raw materials?
Whenever we increase the price of our projects, we see a setback of 10 to 15 per cent in the overall sales funnel. But when we do look at it, the actual sales in the total sales funnel is approximately 10 per cent of the total enquiries. What we have observed over the years is that the number of enquiries go down when there is an increase in price. However, the customer who is looking to buy a house or property or upgrade does come through and convert as a customer.
We saw a trend through the pandemic that people have realised that housing is a very important aspect in their lives, as it was their homes that kept them safe in the difficult times. Demand in established locations has gone up as people want to upgrade.

As the raw material cost for construction is expected to stay volatile in the near future, what is the change in strategy adapted by you to navigate through it or will there be delays in delivery of projects?
We are looking at changing our strategies but we cannot delay any of our projects as that is more expensive than incurring higher prices of raw material for building materials. Waiting for the cost of raw materials to go down will throw us off our schedule and that will be a bigger chaos as the entire line of work will be disturbed. I might end up spending more than I would be saving with the wait duration.
However, with new launches, we can keep control and plan better. But once the project is on the floor, we have to go with the flow and match our deadlines, irrespective of the change in prices of the construction materials.

Tell us about the challenges you have faced with the rise in cost of cement.
We were not expecting the price of raw material to rise so much. We do account for 4 to 5 per cent of inflated prices but when it goes up to 15 to 20 per cent we have had to relook at our strategies. We cannot compromise on the deliveries to our customers, but at the same time we also have to understand how to absorb the cost.
Considerations had to be made if the project price should increase. But that too comes with its own set of challenges with the market price, competitor pricing of projects etc. Those were also the deciding factors on incurring some losses and not being able to transfer the cost to the consumer. However, that will also be averaged out in our future projects.

How is the future of real estate looking with the rise in cost of cement and building materials?
With the rise in cement cost and other building material costs, the same will eventually be carried forward to the buyer. This is a basic entrepreneurial rule. New launches will be expensive. In their initial stages, they may be at a 10 to 20 per cent lower cost, but I am foreseeing a rise in real estate price of about 18 to 20 per cent in the near future.
Materials like steel, cement and concrete are very important in any building. With the price of these materials rising, I have incurred losses in the previous projects, and we will be looking to recover the same in newer projects. This will become a market sentiment as similar challenges will be faced by the developer community.

-Kanika Mathur

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Concrete

Star Cement Named Preferred Bidder For Boro Lakhindong Block

Preferred bidder for limestone mining lease in Assam

Published

4 hours ago

June 29, 2026

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Star Cement has been declared the preferred bidder for the mining lease for Boro Lakhindong West Block following e-auctions conducted by the Government of Assam. The block is located in Boro Lakhindong Village, Umrangso Tehsil, Dima Hasao District, Assam, and extends over an area of 123 hectares. The estimated limestone resource is 207.822 million (mn) tonnes (t), a quantity that will supply raw material for cement production and support the company’s manufacturing operations in the region.

The company is engaged in the manufacturing and selling of cement clinker and cement and distributes products across the north-eastern and eastern states of India. Star Cement operates plants and logistics networks that procure and process limestone to produce clinker for cement, and the addition of Boro Lakhindong is presented as a strategic enhancement of feedstock availability. The preferred bidder status secures rights to the specified lease area under the terms of the auction process.

Financial results for the company in the fourth quarter of fiscal year 2026 showed a consolidated net profit rise of 20.24 per cent to Rs 1,481.0 mn on an 11.54 per cent increase in revenue to Rs 11,735.5 mn compared with the corresponding quarter of the previous year. Those results reflected higher sales volumes and revenue growth in the company’s primary markets and are cited in company disclosures accompanying the lease announcement. The reported performance provides context to the company’s ability to pursue and finance new mining lease opportunities.

Market reaction to the declaration was modest, with the scrip rising zero point thirty six per cent to trade at Rs 212 on the BSE. The award of the Boro Lakhindong lease concludes the e-auction process for the west block and assigns operational rights to Star Cement as the preferred bidder, subject to completion of statutory and contractual formalities.

Concrete

KERC Proposal To Cut Rooftop Solar Export Tariff Raises Concern

Consumers and advocates urge regulator to reconsider change

Published

4 hours ago

June 29, 2026

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The Karnataka Electricity Regulatory Commission (KERC) has proposed a reduction in the tariff paid for surplus electricity that rooftop solar installations export to the grid, prompting concern among consumers, renewable energy advocates and industry specialists. The proposal arrives while the Central government and state governments are promoting clean energy adoption and offering subsidy schemes to encourage rooftop solar deployment. Thousands of households in Karnataka, particularly in Bengaluru, have invested substantial sums in rooftop systems to reduce reliance on conventional power and support state renewable targets.

Stakeholders have raised questions about the implications of a lower export tariff for the financial attractiveness of rooftop solar investments and the pace of the state transition to renewables. Industry analysts warned that a reduction in compensation for excess generation could discourage new installations and extend payback periods for existing systems. Current messaging from authorities, which simultaneously promotes adoption while proposing lower export rates, has been described by user groups as creating contradictory signals for consumers.

Experts argued that policy measures should focus on grid modernisation rather than reducing consumer benefits, with investments in transmission and distribution networks needed to manage higher volumes of distributed solar generation. Consumer groups and renewable advocates are preparing written submissions to the regulator and are urging retention of incentives that support household adoption of rooftop systems. KERC has invited public objections and suggestions as part of a consultation process that will determine the final tariff framework.

The outcome of the consultation is expected to influence the future growth of rooftop solar across the state and shape investor confidence in small-scale renewable projects. Residents who have already installed rooftop panels are monitoring developments closely because changes to compensation mechanisms may affect household finances and the speed of return on investment. Observers noted that coherent policy, aligned incentives and grid upgrades would be essential to sustain momentum in the rooftop solar sector.

Concrete

Indian Railways Plans Green Fly Ash Transport Network

Published

2 days ago

June 27, 2026

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Specialised rail logistics will move fly ash from power plants to infrastructure industries.

New Delhi

Indian Railways is planning a large-scale green logistics initiative to transport fly ash from thermal power plants to industries where it can be reused in infrastructure and construction activities.

The initiative was discussed during a review meeting chaired by Union Minister for Railways Ashwini Vaishnaw. Union Ministers of State for Railways V Somanna and Ravneet Singh Bittu were also present.

India generates nearly 340 million tonnes of fly ash every year from thermal power plants. The proposed initiative aims to create an efficient rail-based transport system using specialised containers and dedicated logistics arrangements to move fly ash safely from power plants to end-use industries.

Fly ash is widely used in road construction, cement manufacturing, brick production, concrete, blocks and boards. By improving its movement through the railway network, the initiative is expected to support better utilisation of this industrial by-product while reducing environmental concerns linked to storage and disposal.

The move also aligns with India’s circular economy goals by converting waste from thermal power generation into a useful raw material for the construction and infrastructure sectors. Wider availability of fly ash can help reduce material costs in areas such as bricks and cement, supporting more affordable infrastructure and housing development.

Through this initiative, Indian Railways aims to provide a cleaner, safer and more organised transport solution for fly ash, turning an environmental challenge into an infrastructure resource.