Cement Sector - Pricing Could Be Range Bound; Real Value Add Will Be In Cost Saving Efficiencies: Nirmal Bang

Nirmal Bang Report

Cement industry, so far, has been static and guided by old systems and going by the example of Adani’s disruptions in other sectors, has generated mixed responses/expectations on the overall impact of the move on the industry.

The sector has been diligent in terms of efficacy of running the business.

Cement industry has seen a steady progression, in terms of adding capacities, modest price hikes- as cement is a commodity, it follows demand/supply dynamics. But going forward, pricing could be range bound and the real add will be in the form of cost saving efficiencies and economies of scale and big players like Adani and UltraTech Cement Ltd. are going to play a pivotal role in the same.

Logistics, as a function has a lot of untapped potential to improve for the sector as a whole and that would entail cost savings in the long run.

Organization like Adani can bring major quantitative change in the supply chain dynamics and force structural change which would augur well for the sector.

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