New Delhi, Jul 13 (IANS): High input costs are likely to prevent cement companies from reducing prices.

However, the seasonally weak second quarter ahead could make it difficult to sustain prices.

"Cement realistions averaged 2 per cent YoY higher in FY21 on a pan-India basis while the prices were strongest in South with a yoy increase of 9-16 per cent," said India Ratings and Research (Ind-Ra).

"Despite a higher demand, Eastern region witnessed a decline in realisations with the influx of supplies. Ind-Ra believes realisations in 1QFY22 have been higher sequentially despite the impact of second wave."

According to the report, price hikes were taken in most regions in June 2021 though reports indicate partial rollback in many pockets except North.

Besides, the ratings agency pointed out that with a gradual easing of lockdowns and pre-monsoon pent-up demand, June is likely to have registered sequential growth of around 20 per cent despite rains affecting construction in some parts of the country, resulting in 35-40 per cent YoY growth in 1QFY22 on a low base.

"Cement volume transported through rail witnessed an increase of 22 per cent month on month in June 2021."

In addition, it said that the listed universe, that generally accounts for 75-80 per cent of the total industry volumes, reported flat volumes in FY21 despite a 30 per cent YoY decline in 1QFY21.

"Volumes during 4QFY21 were 9 per cent higher than 4QFY19 (the last normal 4Q), indicating meaningful growth, led by a strong rural housing and infrastructure demand."

"Capacity utilisations hit 89 per cent in 4QFY21, which in conjunction with higher clinker utilisations indicates that nearly the entire effective capacity was used up during the quarter. Capacity utilisation for the listed space came in at around 70 per cent for FY21, down 200bp YoY."