Shree Cement pledges to boost share of premium products

Shree Cement plans to expand the share of premium products as part of its total sales to 12 per cent over the next six months. This compares to just 9.5 per cent in the 2QFY23-24. According to the company, this will be achieved through the “right pricing”, reports The Hindu Business Line. In the 2QFY22-23, premium products accounted for 7.5 per cent of trade sales. 

“Regarding premiumisation, our focus is on the right pricing. The volumes will come later,” says Hari Mohan Bangur, chairman, Shree Cement. “But if the prices are diluted to get the volume much faster, then you win the sprint race but lose the marathon. So our volumes will grow very gradually, but our prices in premiumisation are at the level at which we wanted. EBITDA is better.” 

Brokerage house Axis Securities expects demand to remain strong in the Indian cement sector, supported by improved government investment in infrastructure, housing and residential projects. Cement prices are currently up 3-5 per cent following price hikes in September and October. According to Axis, sustaining cement prices is crucial for profitability as fuel prices have risen 25-30 per cent from their recent lows.