Chennai: Cement prices were down 6 per cent sequentially in the fourth quarter of FY24. This helped the cement sales volumes grow 7-8 per cent.
Pan-India cement prices took a beating in the second half of the fiscal amid increasing competition and higher supply in the market. Prices plunged by Rs 40-45 per bag in the five months between November 2023 and March 2024 since the last price hike in October 2023.
A 6 per cent sequential decline in cement prices to Rs 370-375 on average per 50 kg bag was seen in the fourth quarter, with exit prices in March at Rs 360-362 per bag.
Thus, at the overall level, cement prices have been subdued, declining 1.5 per cent on average in FY24 from an all-time high of Rs 391 per bag in FY23.
“Heightened competitive intensity due to entry of new players, 40-42 MT of capacity additions, and benign cost pressures catalyzed the cement price correction in FY24 after four consecutive years of price rise at a CAGR of 4 per cent from FY20 to FY23,” said Sehul Bhatt, Director-Research, CRISIL Market Intelligence, and Analytics.
This price correction helped the sales volumes. Cement volume growth recovered to a healthy 7-8 per cent in the last quarter of FY24, on an aggressive volume push, after growing 15 per cent in the first half and logging a moderate slowdown in the third quarter due to regional hindrances.
This ensured the third straight year of healthy demand growth at 11 per cent in FY24 to 441 million tonnes. On this high base, Crisil expects demand growth to cool to 6-7 per cent in FY25.
