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Cement price hike: Make no mistake, it doesn’t signal return of pricing power | The Economic Times

NEW DELHI: The recent hike in cement prices amid rising demand has made investors take a relook at the sector, which has gone through a rough patch in the recent past.

Many brokerages and independent analysts say the price hike will help improve margins and increase profitability of cement manufacturers over the next two years.

“The recent hike in cement prices will boost operating profit of cement firms at a time when costs are falling and demand is rising,” said a CrisilNSE -0.67 % report.

Cement prices rose by Rs 24-25 per 50kg bag in February. The southern region saw the steepest hike, with Hyderabad recording a Rs 77 rise per bag, followed by Rs 62 per bag in Chennai and Rs 52 per bag in Bengaluru.

So has the pricing power returned to this sector?

Analysts are not sure. “Pricing power will come only when capacity utilisation improves,” says Jiten Parmar, Co-founder of Aurum Capital.

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Cement price hike: Cement price hike: Make no mistake, it doesn’t signal return of pricing power – The Economic Times.

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