Cement Prices Decline By 10% YoY in H1 FY25: Report

As the outlook for the Indian cement sector remains stable, the cement prices declined by 10 per cent on a year-on-year (YoY) basis to Rs 330 per bag in the first half of the current financial year (H1 FY25). According to a report by Icra, the average prices dropped by 11 per cent YoY in September 2024.

Coal Prices remained stable on a YoY basis at USD 125 per metric tonne in October 2024 and petcoke prices were down 26 per cent YoY to Rs 10,180 per MT. Diesel prices also reported a decline and dropped by 2 per cent YoY to Rs. 88/litre. In 7M FY2025, the prices of coal, petcoke and diesel were lower by 34 per cent, 15 per cent and 2 per cent, respectively, on a YoY basis. The decrease in their prices led to a reduction in the input costs.

As per Icra, cement volumes were 33.5 million metric tonne (MT), down 3 per cent YoY in August 2024. In the first five months of the current financial year (5M FY2025), the volumes increased by 1 per cent YoY to 178 million MT. The volumes witnessed a substantial increase in the previous financial when it grew by 9 per cent YoY to 426 million MT.

As far as the current financial year is concerned, Icra has expected the volumes to grow by 7-8 per cent to 455-460 million MT. This is driven by the healthy demand from the housing and infrastructure sectors. In its report, Icra stated that with the easing of cost-side pressures, the operating margins are likely to improve by 20 to 40 basis points (bps) to 17.6 to 18 per cent in FY25.