The highest traction for cement is expected from roads with the total outlay for the Ministry of Road Transport and Highways and the National Highways Authority of India rising 25 per cent and 14 per cent, respectively, on-year, said CRISIL. Conversely, an increase in input prices could delay recovery and can impact both margins and credit profiles of cement players,” said Koustav Mazumdar, Associate Director – Research, CRISIL Market Intelligence and Analytics.
“A meaningful recovery in operating margin, however, will depend on sustained softening of fuel prices. Domestic petcoke prices too have followed suit.Īlso, since fiscal 2021 there has been ~80 per cent rise in power and fuel cost, which comprises 30-35 per cent of production cost.
But the margins might improve going ahead with international petcoke prices beginning to ease since the second quarter of this fiscal and further in the third quarter, in tandem with crude oil prices. The disparity in hike in cement prices and cost pressures cut the operating margin to ~13.6 per cent over the first 9 months of this fiscal. With the prices of key inputs including coal and pet coke, the outlook on cement makers’ operating margin remains under pressure, and this will have a bearing on the credit risk profiles of players in the segment. McKinsey to cut about 2,000 jobs, move to help protect partners’ compensation pool – report
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