Improving outlook for Indian producer profitability

Recent price hikes undertaken by cement manufacturers in India are expected to aid margin growth in the FY22, according to projections by brokerage house CLSA.

Local producers have implemented consecutive price increases in March, April and May, and CLSA believes the sector's profitability outlook has improved, stated a report by Indian business news publication Mint.

CLSA expects industry EBITDA/t to increase by three per cent YoY in the FY22. However, CLSA cautions that some of the discretional costs could return in FY22. Moreover, higher commodity prices such as petcoke, coal and diesel are likely to lead to higher costs.