New Delhi, 23 September (IANS). Cement companies’ operating profits can increase by 100 to 150 rupees per tonne by cutting Goods and Services Tax (GST). This information was given in a report released on Tuesday.
Credit rating agency ICRA said in its report that this move of the government will reduce the total construction expenditure in rural housing by 0.8-1 percent, which will increase the amount of construction work and boost capacity increase.
Due to the good demand for cement, the average receipt of cement (GST by removing GST) is expected to increase by 3-5 percent in FY 26, while input prices are expected to be in a limited range.
In addition, operating benefits (OPBIDTA) are expected to increase by 12-18 percent to Rs 900-950 per metric tonne before interest, tax, depreciation and refinement in FY 26.
Despite the early monsoon arrival in some areas, the strong demand from housing and infrastructure areas increased by 8.5 percent of cement in 5 months of FY 26.
In the first five months of the current financial year, cement prices have increased by 7.4 percent on an annual basis, with a major increase in northern and eastern regions.
According to the report, recently, the government is expected to get benefits from the government to reduce the GST rate on cement from 28 percent to 18 percent, and currently the average retail price of cement is between Rs 350-360 per bag, between which consumers are expected to benefit from Rs 26-28 per bag.
According to the report, in FY 2025, OPBIDTA/MT declined on an annual basis in OPBIDTA/MT due to weak receipts (especially during the first half of FY 25, due to prolonged monsoon and impact on government capital expenditure).
Overall, the credit profile of large cement producers is expected to remain stable, which is possible due to good growth in operational income, expected improvement in operating margin, and convenient leverage metrics.
In recent years, this industry has seen consolidation, and the performance of larger companies in the moderate period is expected to be better than moderately sized companies.
“ICRA estimates that by March 2026, the ICRA’s vice-president and co-group chief, the vice-president and co-group of the ICRA, the green energy contributed 43–45 percent to the total power generation by March 2026, while it was about 35 percent by March 2023.”
-IANS
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