How have cement companies performed in FY22 so far?

During Apr-Jan of FY22, all-India cement production grew 25% yoy at 290 million MT. Even I you factor the COVID effect, the output is 4% higher than pre-COVID levels. While monsoons hit cement demand in November, December onwards has been a sharp revival in cement demand. For FY22, ICRA estimates volume growth of 18-20% at 355 million MT.

Problem is the operating margins. Despite 5% better net sales realizations, the EBITDA per tonne fell 10%, according to ICRA. This was driven by a 12% spike in raw material costs, 31% spike in power & fuel costs and 5% spike in freight and transport expenses. The pressure is well and truly on.