Cement prices to remain under pressure, feels Grasim

A senior official of Aditya Birla group-controlled Grasim Ltd said on Saturday that cement prices will remain under pressure over the next six to eight quarters due to oversupply.

"Cement prices are expected to remain under pressure due to an oversupply scenario," Grasim Whole-Time Director and CFO Adesh Gupta told reporters in Mumbai.

Cement prices are ruling low across the country, and particularly in the South. The oversupply is due to new capacity addition, Gupta said. The uptrend in input prices, like the increase in imported and domestic coal prices and the increase in diesel prices, has also hit the cement industry.

However, the company expects cement demand to grow at 10 per cent for the next five years on the back of growth of the overall Indian economy, which will result in increased cement consumption both in the government and private sector, Gupta said.

During the first quarter of the financial year ended 30 June, the company reported an eight per cent decline in consolidated net profit to Rs685 crore compared to the same period last year. Consolidated net revenue improved marginally by 2 per cent to Rs5,119 crore.

Profit was down due to the demerger of the cement business into Samruddhi Cement Ltd (SCL) and the allotment of SCL equity shares to Grasim shareholders.