OfBusiness Cement Dailies

8th May’23

Price

• Prices have fallen by Rs. 20/bag as the price hike initiative failed to sustain in other states of North India. Aggregate prices for Ex Kotputli 10mm are now at Rs. 360/ton and 20mm at Rs. 460/ton. Rains may further reduce demand and lead to more price reductions.

Demand and Supply

• Demand pullback looks difficult as rains make it hard to continue the current infrastructure projects. Delays in construction result in a low Cement requirement and hence the capacity is heavily underutilized right now. Cement makers have seen prices of key raw materials such as Coal and Petcoke drop in recent months, which is the right time for them to buy and stock materials.

News

• According to multiple sources briefed on the matter, Bangur family-owned Shree Cement is in non-binding talks to acquire between 40% and 72% of Sanghi Cement for an enterprise value (EV) of 6,000 crores. Rivals such as UltraTech, Dalmia Bharat, and JSW Cement are said to have held informal discussions for potential acquisitions in the past, but no deal was reached. Sanghi Cement serves the markets of Gujarat, Rajasthan, Maharashtra, and Madhya Pradesh in western India.

OFB’s Opinion

• Price will be a major buying factor as the rains have already stopped construction. People can wait and look to buy Cement as prices fall more in the next week. Consolidation may create more room for Shree to get into Gujarat.
• Aggregates, being unorganized and non-regulated, get no attention from the market. Low demand at present as the rains have stopped construction.