Yes Securities’ Girija Shankar Ray Predicts Marginal Rollback of Cement Price Hike In Southern States
Girija Shankar Ray mentioned that the April-June quarter has historically been a price-driven one for the industry, which further explains the recent price hikes.
Cement prices in southern Indian states saw a hike of Rs 45-50 per bag this week, driven more by cost pressures than a surge in demand. Girija Shankar Ray, Lead Analyst Cement, Institutional Equities Research at YES Securities, said the hike was expected, especially as there had been no price increases in the southern region over the past four months.
“This price hike—nothing to be surprised about—was overdue. In the past four months, there has been no price hike in the southern region, especially in Telangana, Kerala, and Karnataka,” Ray said in an interview.
“Last month, there was news that Tamil Nadu would be increasing the royalty on limestone. So, just to mitigate this incremental cost, it's become a do-or-die situation for them,” he added.
While the hike addresses rising costs, Ray predicted a marginal rollback. “We have to watch for a week to see how this plays out, but I believe there will be a rollback—marginal—but the price will sustain,” he noted.
Beyond the southern region, other markets are also witnessing price hikes, the Yes Securities official mentioned.
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“In the eastern region, there's a hike of around Rs 10-15 per bag, and even in the northern region, there's a Rs 2-3 price increase. Central India has seen hikes of Rs 10-15, and western India around Rs 7-8,” Ray said.
He added that the April-June quarter has historically been a price-driven one for the industry, which further explains the recent price hikes.
On being asked about why he sees a rollback of the cement price hikes in the Southern Indian states, Ray pointed to sluggish demand.
“The market’s acceptability of this Rs 45-50 price hike is low because demand is a bit slow. Even in Q4, which is usually a volume-driven quarter, volumes were not as strong as expected. January and February were impacted by the Mahakumbh Mela and Holi. So, volumes were subdued—not entirely negative—but sluggish,” he explained.
Ray predicted some pickup in volume for Q1 of FY26 but not at levels sufficient to fully support the recent price hikes.
As for other regions, Ray sees prices holding up. “In the eastern region, prices have been hiked consistently over the fourth quarter, and they’re sustained. Supply cuts are being used to hold the market. So, the Rs 10-15 hike there is expected to stick. The same goes for the central region, and even in the western region, the Rs 7-8 increase seems sustainable.”
On stock picks and company performance, Ray doesn’t see Q4 being a standout quarter in terms of earnings surprises, but he is optimistic about select names. “This time, I don’t see much in terms of standout results from companies, but regional players like Shree Cement and Dalmia Bharat should deliver good numbers. We expect around Rs 1,100 to Rs 1,200 EBITDA per tonne for UltraTech and Rs 1,300 levels for Shree Cement,” he said.
When asked about specific southern-based players, Ray highlighted Ramco as a potential outperformer. “Southern region capacity utilisation is around 50-60%. India Cements is at 50-55%. I believe Ramco may do well in the southern pocket,” he noted.
