Cement companies on Thursday raised prices of 50 kg bags by around Rs 3-10 with immediate effect. This movesaw their shares firm up by 2-5%.
Cement companies said the rise was a price correction after rates had been reduced by Rs 20-35 per 50 kilogram bag in the past two-and-a-half months due to slackening demand during monsoon.
We have increased prices by Rs 8-10 per bag effective from today as the company had reduced prices by Rs 20-25 per bag for the last two-and-a-half months. The price is getting corrected after a sharp fall, an official from Binani Cement said on condition of anonymity.
The official said todays price hike was only a correction and post-October,prices will rise more.
He said the company expects prices to recover as demand is likely to pick up in Mumbai and other parts of Maharashtra post-monsoon.
Indias southwest monsoon starts in June and runs till September-end.
Earlier this week,Binani Group Managing Director Vinod Juneja told TickerNews Service that higher fuel and raw material costs like coal are hurting the companys profits. He said prices are likely to pick up from November.
In the monsoon season,companies reduced prices of cement by around 10-15% and it is actually getting corrected. Also,there was a sharp difference between few brands and the price hike is meant for intra-brand adjustments, he said. Inventory still remains on the higher side and pressure on prices continue,he added.