Cement industry volume is likely to have grown high single digits in April 2023 at ~35 mtpa, implying about 80 percent utilization and relatively higher 85 percent clinker utilization, according to Antique Stock Broking. The volumes likely grew in mid-single digit in North and West, whereas East, Central and South likely grew in high single digit when compared with same period last year. For FY24, the brokerage expects industry growth to remain robust at 7-8 percent aided by higher pre election government spending, after witnessing 9-10 percent growth in FY23.

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Average pan-India prices are broadly flat since March. Price increase of Rs 10/bag was witnessed in South, after witnessing Rs 20/bag fall in Q4FY23. Prices in north India were flat, while West and Central regions witnessed price increases of Rs 3-5/bag. East India witnessed Rs 5/bag price decline, according to various channel checks.

Also read: Expect cement prices to rise in May or June: Anil Singhvi, Shree Digvijay Cement

Domestic petcoke prices are down 20 percent since March to Rs 14,639 in May and likely to see further correction in June revision. Imported fuel prices corrected further by ~10 percent month on month in May till date and are now down nearly 50 percent from their peak. According to Antique Stock Broking, the benefit of 10 percent fall in fuel prices is equivalent to 2 percent price hike on EBITDA. This is likely to translate into benefit of Rs 250-300/ton reflecting in initial two quarters of financial year 2023-24.

In the second quarter, India enters into a seasonally weak period, however, earnings may surprise led by lower costs and increased consolidation.

Ultra Tech, the largest player in the Indian cement industry, achieved 100 million tonnes of production, dispatches and sales in FY23. The company clocked 15 percent volume growth during the period. This was backed by an effective capacity utilisation of 84 percent capacity utilisation for the year.

Also read: Here’s why it is imperative for cement industry to take adequate price hikes this quarter