GST Rationalisation Expected To Reduce Cement Prices By Rs 30-40 Per Bag: Shree Cement’s HM Bangur
The chairman of Shree Cement cautioned that the market enthusiasm may be premature, as the government is yet to announce specific rate cuts.
The cement sector is optimistic about the anticipated GST rationalisation and its potential impact. Although cement demand is largely inelastic, a lower GST rate could reduce the overall cost of infrastructure and housing, thereby boosting long-term demand, Shree Cement Chairman HM Bangur said, welcoming the likely move of the government.
Speaking to NDTV Profit, Bangur termed it "encouraging news". He said though demand for cement was inelastic, in the long term lower cost of infrastructure and housing would definitely increase demand. "So, this is very positive news. We are eagerly awaiting it, but let it happen.”
Bangur cautioned that market enthusiasm may be premature, as the government is yet to announce specific rate cuts. However, he added that if GST is reduced, cement prices could eventually drop by Rs 30 to Rs 40 per bag.
On passing the benefits to consumers, he said they would not be able to pass on the total reduction of Rs 30 to Rs 40 immediately. "It will be passed gradually. Some of the margins will go to the consumers, some will go to the dealers, some will come to the manufacturer … everybody will be benefited.”
Bangur pointed out that while margins might improve temporarily due to a lag in price adjustment, the full impact would unfold over the next two quarters.
"For the next three to six months, there will definitely be many positive results—higher margins, stronger demand, and a release of pent-up demand. Dealer stock will be almost nil. So we feel very good about the upcoming third quarter,” he said.
Optimistic about the second half of FY26, Bangur believes improved rural income due to a good monsoon and continued infrastructure growth will drive both demand and profitability in the sector.
“Delhi and North India are now having good rains ... Even Mumbai side. Looking at this, I will say demand has reduced a little bit, but it will increase manifold because of good agriculture. If the rates are good, we always find that one quarter is bad and the next four quarters are very good because rural income increases,” the chairman of Shree Cement added.
On Aug. 19, Shree Cement shares fell 1.55% to Rs 30,855 at 2:15 p.m. on NSE, while the Nifty 50 rose 0.25% to 24,940.20 points.
