Demand environment continued to remain dismal in Dec’16 led by impact of demonetization, which affected trade segment sales in most pockets. However, price cut (-2.2% m-o-m) undertaken by the industry aided monthly demand to improve as most companies saw a monthly volume uptick in the range of ~5-15%. Notably, there has been a pickup in the construction of selected real estate projects as many developers intend to complete their projects before the implementation of new Real Estate Bill.

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 Though all India average cement price has been subdued and declined 2.2% month-on-month (m-o-m) in Dec’16, average price increased by ~4.3% yoy mainly on account of sharp yoy improvement in Northern (+15.8% yoy) & Western realizations (+8.9% yoy). Notably, there had been a sharp price drop in Northern & Western regions in Dec’15 (~Rs30/bag) led by price cut taken by the companies to push volume so as to meet year-end sales target. Further, barring Southern markets, all regions saw a price correction of ~2-4% m-o-m in Dec’16.