It is reported that cement prices in North, East and Central India have been hiked by INR 10 per bag to INR 25 per bag in the month of September.

ET Now reported that cement prices have been raised by INR 25 per bag in Eastern UP to INR 225, and by INR 10 to INR 15 per bag in Delhi, Punjab and Rajasthan. Companies operating in these areas are ACC, Ambuja, Ultratech, JP Associates, Birla Corp, Shree Cements.

According to a report by Sharekhan Ltd dealers are of the view that market will find it difficult to absorb the present price hike given the current demand scenario.

The volume growth for the top three domestic cement players viz ACC, Ambuja Cements and Ultratech Cement (Ultratech) for the month of August 2011 was mixed on a year on year basis. Among the companies, ACC registered a better performance with a robust 19.7% growth in its dispatches. Ultratech and Ambuja Cements posted a growth in their dispatches of 3.4% and 2.7% respectively.

According to a recent report by Sharekhan Ltd, however, the volume growth is largely on account of the low base affect and not on account of a real pick up in cement offtake. On a month on month basis, all the large players have actually posted a de-growth in their dispatches.”

In terms of demand, cement offtake in most parts of the country has been affected primarily by heavy monsoon and political hurdles (particularly in Andhra Pradesh).

The report added that "We believe the sector could underperform in the coming six months on the possibility that the cement manufacturers may fail to adhere to the supply discipline. However, we believe any correction in the sector will provide an investment opportunity in selected companies.”

(Sourced from ET)