Cement manufacturers across India have struggled to sustain the price hike introduced earlier this month as they prioritize boosting sales volumes. Despite rising fuel costs, prices have been rolled back, which analysts believe could impact operating margins during the typically strong March quarter.
Power and fuel costs generally contribute 22-24% of cement production expenses, with petcoke accounting for about 15% of this. In the current quarter, international petcoke prices have surged by 13% sequentially, while domestic prices have risen by 10%.
Although most cement companies are expected to feel the impact, identifying those most affected remains challenging, according to Mangesh Bhadang of Centrum Broking. However, companies like ACC and Sagar Cement are likely to be less affected, thanks to their higher reliance on domestic coal.
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