Cement

Business model

Cement is a regional commodity. Plants are placed near limestone reserves and ship cement to a 250-300 km radius (beyond which freight kills the economics). Demand is driven by construction - housing, infrastructure, commercial real estate.

Margins are determined by realisations per tonne (price) minus cost per tonne (limestone, fuel, power, freight). Fuel is the swing factor: pet coke, imported coal, and lately renewable power.

Key metrics

Volume growth - units shipped, in million tonnes
Realisation per tonne - average selling price; varies by region (West/South have historically commanded premium)
EBITDA per tonne - the cleanest single profitability metric. ₹800-1,200/tonne is the recent industry band; below ₹600 is stressful, above ₹1,400 is exceptional.
Capacity utilisation - under 70% is bad operating leverage; above 85% suggests pricing power coming
Fuel mix - % petcoke / coal / waste-heat / renewable. Determines cost volatility
Regional mix - North / South / East / West / Central. South cycle has been softer historically

Cement

Business model

Margins are determined by realisations per tonne (price) minus cost per tonne (limestone, fuel, power, freight). Fuel is the swing factor: pet coke, imported coal, and lately renewable power.

Key metrics

Volume growth - units shipped, in million tonnes
Realisation per tonne - average selling price; varies by region (West/South have historically commanded premium)
EBITDA per tonne - the cleanest single profitability metric. ₹800-1,200/tonne is the recent industry band; below ₹600 is stressful, above ₹1,400 is exceptional.
Capacity utilisation - under 70% is bad operating leverage; above 85% suggests pricing power coming
Fuel mix - % petcoke / coal / waste-heat / renewable. Determines cost volatility
Regional mix - North / South / East / West / Central. South cycle has been softer historically