Cement prices continued their upward trajectory in January 2025, with the average trade price increasing by Rs 2 per bag to Rs 343 from Rs 341 in December 2024, according to Nomura analysts. Despite the price rise, demand growth remains uncertain, with regional variations in pricing trends across the country.
The Eastern region saw the sharpest increase, with prices rising Rs 5 month-on-month (MoM) to Rs 314 per bag, driven by a Rs 20 hike in West Bengal. In the Western region, the average price rose by Rs 3 MoM to Rs 353 per bag, buoyed by a Rs 10 hike in Gujarat, which was the only region to experience notable volume growth in December 2024.
In contrast, the Central region witnessed a Rs 3 MoM decline in prices, settling at Rs 365 per bag due to weak demand in December. Dealers anticipate subdued activity until mid-January, citing cold weather that hampers construction.
Prices in the Southern region remained stable at Rs 323 per bag, reflecting weak volumes in Hyderabad attributed to slower real estate and construction activity. Dealers in the South expect muted demand in early January, impacted by labour shortages due to regional festivals like Pongal. However, demand may pick up later as government projects in Kerala with March 2025 deadlines gather pace.
Nomura notes that the Central region is the only area experiencing a 1% price drop, while other regions have recorded mild to significant price increases.
Analyst Recommendations
Among cement manufacturers, Nomura continues to favour UltraTech Cement, maintaining a “buy” rating alongside Shree Cement, Ambuja Cement, and Ramco Cement. The brokerage holds a “neutral” stance on Nuvoco Vistas Corporation and ACC, while recommending a “reduce” rating on Dalmia Bharat.
While price trends suggest resilience, demand recovery is expected to remain uneven across regions through mid-January.
(moneycontrol)