As expected, cement prices were under pressure across the country during August given monsoon, according to HDFC Securities. ''Further wet spells in September will not help, but cement makers have been able to wriggle out higher prices YoY. North (+9.5%), West (10.5%) and South (11.6%) saw the highest YoY price increases in August.''
''South remains interestingly poised. Sharp increases in prices (in mid-June) will help companies improve their dismal profitability, though volumes will remain constrained. South needs prices of Rs 330/bag on an average to return to its historical peak profitability. Further price hikes are therefore imminent. However, the fact that some of the AP players are selling for Rs 220-230 in Orissa (vs headline pricing of Rs 290 in AP itself) is not an encouraging sign,'' it said.
''DIPP reported volume growth of ~16% in July. August may see some tapering down in the growth rate as monsoon gathered steam across the country. Cement market participants sounded positive on the future outlook and believe demand is likely to pick up once dry spells commence. In South, government formation exercise is yet not complete in AP/Telengana and we expect a completion will provide some fillip to the demand,'' it added.
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