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There is a possibility of decline in the profits of cement companies, know how much can decrease profit-report

Cement Companies Profit: Profits of cement companies may decline by 15 per cent on account of spurt in raw material prices, despite strong demand. Agency Crisil, however, said in the report that from the point of view of the debt scenario, the high demand will provide some relief to the cement industry.

High cost of raw materials may reduce profits of cement companies by 15%
According to the report, the operating profit of cement manufacturers may decline by 15 per cent year-on-year to Rs 900-925 per tonne in the current financial year. It had decreased by nine per cent in the last financial year as well.

Average cost of cement production increased
The agency said that higher earnings due to demand would not be enough to compensate for the hike in prices of coal, petcoke and diesel. The high cost of raw materials has increased the average cost of production.

Cement demand increased in the first quarter
Crisil said that the growth of 17 per cent in cement demand in the first quarter of the current financial year, however, is the result of a weak comparative base in the corresponding quarter of the previous financial year. But this is good news. It will decrease in the coming quarters and may remain 8 to 10 per cent in the entire financial year. Despite this, it will be the highest after the financial year 2018-19.

What came out in the report based on the analysis of 22 cement companies
The report, based on an analysis of 22 cement companies that account for 85 per cent of the cement market, said the high demand would somewhat offset the impact on cement manufacturers’ overall operating profit and cash.

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