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Business Standard
2 days ago
- Business
- Business Standard
Cement firms' Q4 volumes grow, but realisations decline amid weak pricing
Top Indian cement companies reported a healthy sales volume growth in the quarter ended March (Q4FY25), but saw a decline in their realisations amid weak pricing. Excluding Shree Cement (whose blended realisation remained flat year-on-year), UltraTech Cement, Ambuja Cements, JK Cement, Dalmia Bharat, Ramco Cements, and Birla Corp posted decreased realisations on a Y-o-Y basis. In Q4FY25, pan-India cement prices stood at Rs 362/bag, down by 3 per cent Y-o-Y. The South was hit the most with a 10 per cent decline in prices, according to Crisil Intelligence. Quarter-on-quarter (Q-o-Q), the prices grew by 2 per cent, with Q4FY25 being a seasonally strong quarter. According to Khushbu Lakhotia, director, India Ratings & Research, the cement price reduction was largely driven by a reduction in power and fuel costs, given the benign coal and petcoke prices. 'With a slow start to demand, large capacity additions and an increasing competitive intensity in FY25, cement prices witnessed the sharpest decline in nearly two decades. Prices remained weak as industry players focused on maximising sales volumes and market share growth,' Lakhotia said. UltraTech commissioned 17.40 million tonnes per annum (mtpa) capacity during FY25, while Ambuja surpassed 100 mtpa. Dalmia Bharat's capacity in FY25 increased to 49.5 mtpa from 44.6 mtpa in FY24. According to analysts at Mirae Asset Sharekhan, the consolidation in India's cement sector and the weak demand have put pressure on the pricing environment. The overall cement demand, however, improved by 4 per cent during Q4FY25, leading to higher volumes. Apart from Dalmia Bharat and Ramco Cements, all the other top firms posted an increase of anywhere between 3.3 and 16.9 per cent in their sales volume due to improved cement demand. Overall, the industry volume grew by 5 per cent Y-o-Y. UltraTech's volume growth was driven by its acquisitions of India Cements and Kesoram, while Ambuja's growth was on the back of Orient Cement and Penna Cement. However, blended earnings before interest, taxes, depreciation, and amortisation (Ebitda) of UltraTech and Ambuja declined on a Y-o-Y basis, despite lower input costs and better operating leverage, while that of Shree, Dalmia Bharat, and JK Cement improved. An industry expert, on the condition of anonymity, stated that the profitability of UltraTech and Ambuja saw only a limited impact from acquisitions. The overall performance of the two cement giants remained strong amid a comparatively low share of India Cements in UltraTech's total volumes and Ambuja completing the acquisition of Orient Cement in April 2025 (Q1FY26). Sequentially, all the top cement makers witnessed an improved, positive growth in blended Ebitda. All the cement firms were able to reduce total costs by 1-7.2 per cent Y-o-Y in Q4FY25 due to lower input costs, particularly that of fuel, and improved operating leverage. However, despite a reduction of around Rs 200/t in costs, the industry's Ebitda improved only marginally by Rs 20-30/t due to the continued weakness in cement prices, according to Lakhotia. Overall in FY25, the prices declined by 7 per cent Y-o-Y to Rs 340/bag. Meanwhile, the top companies' volumes grew anywhere between less than 1 per cent and over 10 per cent Y-o-Y. The blended Ebitda and realisations also declined. The companies managed to reduce their total costs in FY25. For FY26, the companies are optimistic about improved cement demand on the back of the government's focus on infrastructure and housing demand and price environment. According to the analysts at Mirae Asset Sharekhan, with the return of government capex, the demand and pricing are expected to improve. The margins of the whole sector are expected to improve from here on and will increase profitability. UltraTech's management stated that prices showed sequential improvement in April 2025 across most regions, notably in the southern markets, although overall realisation growth remained modest. It stated that April pricing trends were better compared to both March-end levels and the Q4 FY25 average. According to the analysts at JM Financial, the industry's profitability is likely to improve further in Q1FY26. Pan-India average cement prices have increased by 4 per cent Q-o-Q in the quarter so far (over Rs 15/bag), mainly led by sharp price hikes in the South and the East, while other regions were broadly flat on a sequential basis. 'With the early onset of the monsoon, we see an increasing possibility of some price reversal over the next few days,' the analysts noted. According to Lakhotia, the decadal high-capacity additions announced by companies, in addition to the ramp-up of the acquired assets that were operating at sub-optimal capacities earlier, could limit the uptick in prices despite a mid-to-high single-digit demand growth. 'Price hikes were taken by companies over April-May, that could support realisations in Q1FY26, although moderations are likely over June-July with the early onset of monsoons.' Going ahead, the cement firms have planned aggressive capacity expansion plans with UltraTech leading the pack. The company aims to expand its grey cement capacity to 195.8 mtpa from the current 183.4 mtpa. Ambuja aims to expand its capacity to 118 mtpa by FY26, while Shree Cement aims to enhance its capacity to over 80 mtpa by 2028 from the current capacity of 62.8 mtpa. Dalmia Bharat is eying a capacity of 75 mtpa by FY28 from the current 49.5 mtpa.
Time of India
03-06-2025
- Politics
- Time of India
Sukhu launches Rajiv Gandhi Van Samvardhan Yojana, Green Adoption Scheme
Shimla: Chief minister Sukhvinder Singh Sukhu on Monday launched the 'Rajiv Gandhi Van Samvardhan Yojana' and the 'Green Adoption Scheme' from Hamirpur. The 'Rajiv Gandhi Van Samvardhan Yojana' aims to increase the green cover by planting fruit-bearing trees on barren and degraded forest areas. It will also generate employment and income for local communities by ensuring the participation of mahila and yuvak mandals, besides the self-help groups, said Sukhu. The CM also handed over certificates to two mahila mandals from Nadaun – Amlehad and Bhawdan – which will carry out the plantation activities on two hectares of forest land and ensure its maintenance for a period of five years. In the initial phase of the 'Green Adoption Scheme', Ambuja group will undertake plantation work on 25 hectares, while the Adani Foundation and UltraTech would adopt 10 hectares each. Sukhu handed over certificates to these organisations as a mark of official recognition. The scheme envisages encouraging private enterprises, corporate houses, and non-govt organisations as a part of their social responsibility to adopt barren forest land and undertake afforestation work. During the event, the CM inspected the passing-out parade of the newly appointed Van Mitras and interacted with them. He said the forest department faced a shortage of field staff, which posed challenges to forest protection. To address this, appointments of Van Mitras were made based on merit, with many young women taking the lead in securing these roles. Sukhu said the state govt was focusing on women empowerment and the reservation for women in police recruitment had been increased to 30%. In Lahaul-Spiti, all key administrative officers, including the deputy commissioner, were women with decision-making authority. The CM urged Van Mitras not to limit their role to forest protection alone but also to engage with rural communities to spread awareness about the importance of forests. He emphasised the need to prevent illegal logging, remain vigilant against forest fires, and contribute actively to plantation drives and forest development initiatives by fostering public participation. The chief minister also announced the opening of three new wellness centres under the municipal corporation of Hamirpur. He also released a souvenir titled 'Samvaad' dedicated to Van Mitras and launched a book titled 'The Mountainous Wilderness of Spiti'. A new mobile application was also launched to facilitate attendance tracking of Van Mitras. MSID:: 121573668 413 |
Time of India
27-05-2025
- Business
- Time of India
Top 10 cement firms to add 140 MMTPA capacity in five years: Moody's
NEW DELHI: Growing cement demand will fuel consolidation in the cement sector, where large players are acquiring smaller regional players as they rush to increase production capacity to match the rising consumption, said Moody's Ratings . Over the past five years, the cement sector in India has witnessed significant industry consolidation and top 10 producers in the country have acquired around 140 MMTPA (million metric tonnes per annum) of domestic cement capacity, valued at around Rs 890 billion (USD 10.5 billion), from smaller regional players, it said. "Large companies with a pan-India presence such as UltraTech and Ambuja will continue to engage in M&A (merger and acquisition) to acquire smaller regional producers with weaker capacity utilisation and lower profitability," it said. Given the presence of a large number of smaller cement producers, numbering over 70, companies in South India are more exposed to industry consolidation compared with those domiciled in other parts of the country. South India, with an installed capacity of more than 200 MMTPA, comprising states of Telangana, Tamil Nadu, Kerala, Karnataka and Andhra Pradesh, is the largest cement-producing region in the country followed by the north and east, each with a capacity of around 150 MMTPA. According to Moody's Ratings, cement demand in India is expected to grow "substantially" through the end of the decade with a consumption growth of 6 to 7 per cent CAGR, supported by tailwinds such as rising housing needs and government-led infrastructure spending. This will force the industry to expand capacity by a third in the next five years to cater to growing demand. "Larger players with a pan-India presence will likely acquire smaller regional producers with weaker capacity utilisation and lower profitability. Ongoing industry consolidation combined with steady demand growth will keep capacity utilisation stable for the incumbents," the report said. The industry capacity will likely expand by a third in the next five years as leading companies increase capacity to cater to growing demand. "Based on announced capacity additions by the top 10 cement producers in India, who account for around 75 per cent market share, overall industry capacity will increase by around 30 per cent or 200 MMTPA by the end of the decade. Around 170 MMTPA of this new capacity is expected to be commissioned by FY27-28," the report said. Aditya Birla group firm UltraTech and Adani Group's Ambuja, India's top two cement producers, will contribute to around 30 per cent of this growth. " Shree Cement and Dalmia Bharat, the third- and fourth-largest cement producers in the country, respectively, will together add around 50 MMTPA of new capacity and account for around 25 per cent of the upcoming capacity additions. "Meanwhile, smaller players such as JK Cement, JSW Cement and JK Lakshmi Cement will almost double their existing capacity and account for 35 per cent of the announced capacity expansions," it said. The report also highlighted that India's per capita cement consumption is 260 kg, which is less than half the global average consumption of 540 kg, which indicates potential for cement consumption to rise as the Indian economy continues to grow. "Cement consumption in India will continue to grow at a CAGR of 6 per cent-7 per cent through the end of the decade to reach around 670 MMTPA by 2030 from 445 MMTPA in FY23-24," it said. It expects India's cement demand to be driven by the expected growth in its two largest cement consuming sectors - housing, which accounts for 55-60 per cent of cement consumption in the country, and infrastructure that accounts for 28-30 per cent. However, the report also cautioned that volatility in raw material prices will be key risks that will reduce cement producers' profitability. "Changes in the regulatory landscape can lead to fluctuation in prices of limestone, a key raw material for the cement sector, and reduce profitability of cement producers," it said. For instance, in February, the Tamil Nadu government imposed a tax of Rs 160 per tonne on the mining of limestone in the state. Given the average industry profitability of Rs 800/tonne-Rs 900/tonne, such levies and taxes can reduce cement producers' profits by almost 15 to 20 per cent, if implemented on a pan-India basis, it said. Moreover, coal and petcoke are the main sources of energy in cement manufacturing and due to low domestic availability of these commodities for the cement sector in the country, cement producers are largely reliant on imports.
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Business Standard
26-05-2025
- Business
- Business Standard
Cement demand to fuel consolidation; top 10 firms to add 140 MMTPA: Moody's
Growing cement demand will fuel consolidation in the cement sector, where large players are acquiring smaller regional players as they rush to increase production capacity to match the rising consumption, said Moody's Ratings. Over the past five years, the cement sector in India has witnessed significant industry consolidation and top 10 producers in the country have acquired around 140 MMTPA (million metric tonnes per annum) of domestic cement capacity, valued at around Rs 890 billion ($10.5 billion), from smaller regional players, it said. "Large companies with a pan-India presence such as UltraTech and Ambuja will continue to engage in M&A (merger and acquisition) to acquire smaller regional producers with weaker capacity utilisation and lower profitability," it said. Given the presence of a large number of smaller cement producers, numbering over 70, companies in South India are more exposed to industry consolidation compared with those domiciled in other parts of the country. South India, with an installed capacity of more than 200 MMTPA, comprising states of Telangana, Tamil Nadu, Kerala, Karnataka and Andhra Pradesh, is the largest cement-producing region in the country followed by the north and east, each with a capacity of around 150 MMTPA. According to Moody's Ratings, cement demand in India is expected to grow "substantially" through the end of the decade with a consumption growth of 6 to 7 per cent CAGR, supported by tailwinds such as rising housing needs and government-led infrastructure spending. This will force the industry to expand capacity by a third in the next five years to cater to growing demand. "Larger players with a pan-India presence will likely acquire smaller regional producers with weaker capacity utilisation and lower profitability. Ongoing industry consolidation combined with steady demand growth will keep capacity utilisation stable for the incumbents," the report said. The industry capacity will likely expand by a third in the next five years as leading companies increase capacity to cater to growing demand. "Based on announced capacity additions by the top 10 cement producers in India, who account for around 75 per cent market share, overall industry capacity will increase by around 30 per cent or 200 MMTPA by the end of the decade. Around 170 MMTPA of this new capacity is expected to be commissioned by FY27-28," the report said. Aditya Birla group firm UltraTech and Adani Group's Ambuja, India's top two cement producers, will contribute to around 30 per cent of this growth. "Shree Cement and Dalmia Bharat, the third- and fourth-largest cement producers in the country, respectively, will together add around 50 MMTPA of new capacity and account for around 25 per cent of the upcoming capacity additions. "Meanwhile, smaller players such as JK Cement, JSW Cement and JK Lakshmi Cement will almost double their existing capacity and account for 35 per cent of the announced capacity expansions," it said. The report also highlighted that India's per capita cement consumption is 260 kg, which is less than half the global average consumption of 540 kg, which indicates potential for cement consumption to rise as the Indian economy continues to grow. "Cement consumption in India will continue to grow at a CAGR of 6 per cent-7 per cent through the end of the decade to reach around 670 MMTPA by 2030 from 445 MMTPA in FY23-24," it said. It expects India's cement demand to be driven by the expected growth in its two largest cement consuming sectors - housing, which accounts for 55-60 per cent of cement consumption in the country, and infrastructure that accounts for 28-30 per cent. However, the report also cautioned that volatility in raw material prices will be key risks that will reduce cement producers' profitability. "Changes in the regulatory landscape can lead to fluctuation in prices of limestone, a key raw material for the cement sector, and reduce profitability of cement producers," it said. For instance, in February, the Tamil Nadu government imposed a tax of Rs 160 per tonne on the mining of limestone in the state. Given the average industry profitability of Rs 800/tonne-Rs 900/tonne, such levies and taxes can reduce cement producers' profits by almost 15 to 20 per cent, if implemented on a pan-India basis, it said. Moreover, coal and petcoke are the main sources of energy in cement manufacturing and due to low domestic availability of these commodities for the cement sector in the country, cement producers are largely reliant on imports.
Time of India
26-05-2025
- Business
- Time of India
Growing cement demand to fuel consolidation, top 10 firms add 140 MMTPA capacity in 5 years: Moody's
Growing cement demand will fuel consolidation in the cement sector, where large players are acquiring smaller regional players as they rush to increase production capacity to match the rising consumption, said Moody's Ratings. Over the past five years, the cement sector in India has witnessed significant industry consolidation and top 10 producers in the country have acquired around 140 MMTPA (million metric tonnes per annum) of domestic cement capacity, valued at around Rs 890 billion (USD 10.5 billion), from smaller regional players, it said. "Large companies with a pan-India presence such as UltraTech and Ambuja will continue to engage in M&A (merger and acquisition) to acquire smaller regional producers with weaker capacity utilisation and lower profitability," it said. Given the presence of a large number of smaller cement producers, numbering over 70, companies in South India are more exposed to industry consolidation compared with those domiciled in other parts of the country. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Moose Approaches Girl At Bus Stop In Kerala - Watch What Happens Happy in Shape Undo South India, with an installed capacity of more than 200 MMTPA, comprising states of Telangana, Tamil Nadu, Kerala, Karnataka and Andhra Pradesh, is the largest cement-producing region in the country followed by the north and east, each with a capacity of around 150 MMTPA. According to Moody's Ratings, cement demand in India is expected to grow "substantially" through the end of the decade with a consumption growth of 6 to 7 per cent CAGR, supported by tailwinds such as rising housing needs and government-led infrastructure spending. Live Events This will force the industry to expand capacity by a third in the next five years to cater to growing demand. "Larger players with a pan-India presence will likely acquire smaller regional producers with weaker capacity utilisation and lower profitability. Ongoing industry consolidation combined with steady demand growth will keep capacity utilisation stable for the incumbents," the report said. The industry capacity will likely expand by a third in the next five years as leading companies increase capacity to cater to growing demand. "Based on announced capacity additions by the top 10 cement producers in India, who account for around 75 per cent market share, overall industry capacity will increase by around 30 per cent or 200 MMTPA by the end of the decade. Around 170 MMTPA of this new capacity is expected to be commissioned by FY27-28," the report said. Aditya Birla group firm UltraTech and Adani Group's Ambuja, India's top two cement producers, will contribute to around 30 per cent of this growth. " Shree Cement and Dalmia Bharat , the third- and fourth-largest cement producers in the country, respectively, will together add around 50 MMTPA of new capacity and account for around 25 per cent of the upcoming capacity additions. "Meanwhile, smaller players such as JK Cement , JSW Cement and JK Lakshmi Cement will almost double their existing capacity and account for 35 per cent of the announced capacity expansions," it said. The report also highlighted that India's per capita cement consumption is 260 kg, which is less than half the global average consumption of 540 kg, which indicates potential for cement consumption to rise as the Indian economy continues to grow. "Cement consumption in India will continue to grow at a CAGR of 6 per cent-7 per cent through the end of the decade to reach around 670 MMTPA by 2030 from 445 MMTPA in FY23-24," it said. It expects India's cement demand to be driven by the expected growth in its two largest cement consuming sectors - housing, which accounts for 55-60 per cent of cement consumption in the country, and infrastructure that accounts for 28-30 per cent. However, the report also cautioned that volatility in raw material prices will be key risks that will reduce cement producers' profitability. "Changes in the regulatory landscape can lead to fluctuation in prices of limestone, a key raw material for the cement sector, and reduce profitability of cement producers," it said. For instance, in February, the Tamil Nadu government imposed a tax of Rs 160 per tonne on the mining of limestone in the state. Given the average industry profitability of Rs 800/tonne-Rs 900/tonne, such levies and taxes can reduce cement producers' profits by almost 15 to 20 per cent, if implemented on a pan-India basis, it said. Moreover, coal and petcoke are the main sources of energy in cement manufacturing and due to low domestic availability of these commodities for the cement sector in the country, cement producers are largely reliant on imports.
