Cement Prices to Rise After GST Cut? Impact on Real Estate & Infra | Anuj Khandelwal | Business News - video Dailymotion

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00:00theme let's talk about a sector of beneficiaries and that is cement among all the other sectors

00:05you also have cement that has seen big cuts coming in from on the gfc front from 28 percent

00:11to 18 percent now to understand the impact on their business as well as the overall sector

00:15we have mr anath khandelwal the business head of grace cement at jk cement joining us and

00:20good morning mr khandelwal and thanks so much for your time today first up let's understand what

00:26this could mean for your company how do you see the gfc cut on cement from 28 to 18 now

00:31benefiting your company and the overall cement sector at time at once and how will the impact

00:38be structured for the industry what could be the tenure year okay firstly many thanks for you know

00:47having me on this segment look it's a it's a fantastic and a welcome move done by the government

00:53to cut the rates of cement from 28 to 18 percent and we are quite cognizant that it would lead to

00:59a quite a bit of a revenue hit for the government but it will be a big positive for the sector because

01:04firstly it makes housing more affordable and not just housing even for our channel partners it would

01:12also mean that you know the working capital which they invest in the business will be less and more

01:16people will be able to join the business on the infrastructure side the spends would be less so

01:21i believe look uh these are early days we'll see how it will play out but uh personally i feel that

01:27the demand is going to go up quite a bit and we will see the kind of uh construction and the

01:33infrastructure investment which we were always uh thinking of playing out now so uh as the sector

01:40you know as the sector uh enjoys this uh benefit uh we as jk cement also are well poised uh to you know

01:48make uh you know get benefit out of that you are right our sector is one of the beneficiaries

01:53and as jk cement given that we are putting in so many new capacities if it if this move becomes

01:59fundamentally positive for the sector in terms of demand it will help us uh quite a lot all right um

02:07along with that um mr kandarwal hi morning this is srishti also joining in but when we talk to some of

02:13the industry experts they do believe that the demand is usually relatively price and are inelastic

02:19and hence the overall impact on demand is likely to be minimal but consumers may move up and buy the

02:26premium products rather uh would you concur with this view yes see look uh there are two three things

02:34they can go for more premium products uh and hence you know upgrade the quality they you know who knows

02:42when they work out the budget for the house they might uh you know they might want to extend the

02:47house a bit more because cement is one of the one of the big raw materials especially when you put

02:53in the structure of the house so i you know basically we believe that this will be yes you are right

03:00is a you know uh building a house is slightly an inelastic kind of a decision but uh you know given

03:07that there's such a substantial cut in gsc and the taxes people might want to uh you know either go

03:16for more premium products or even think of increasing the budget to extend the house

03:19right and you know mr khandir while you're talking about premium products help us understand how much

03:26uh in terms of percentage value of your company's portfolio comes under premium category a and category

03:32be cement and also if you think this gst cut will increase the company's focus towards premium

03:37products more see the focus towards the premium products was always there because we wanted to

03:43give the best service and the best product to the customers so that doesn't change however uh you

03:49know this this move definitely gives it a boost as of now to answer your question um out of our entire

03:55trade sales uh 17 odd percent is premium product sales it was 10 to 12 percent a couple of years

04:02back and with a lot of focus on both product improvement and service we brought it to 17

04:07percent it it's a priority area for us will remain a priority area this move by the government such a

04:13welcome move will will definitely help us in this journey but mr khandirwar this brings us to the most

04:20important question then will gst cut pave the way for the cement price high now we understand that you

04:27cannot talk about the cement prices but because the cement prices have not uh sustained off late because

04:33of the monsoon season as well do you believe that this gst rate cut gives a good opportunity for the

04:40industry to hide the prices it's not not necessarily look firstly uh uh our basic prices won't change uh

04:52you know government has taken a tax uh you know such a substantial cut on the tax it is uh it is only

04:59imperative for us to pass it on to the customers because that's not something which we were running

05:04because the government taxation so you know uh we've completely passed on whatever the tax benefits

05:12which were there to the customers starting midnight uh uh today uh look pricing uh is is a sub is a

05:21subject matter of market dynamics so it depends on the market dynamics the demand supply scenario and

05:26everything so it's not just one event uh which can you know dictate how much the pricing will go up or

05:33down it's a really a matter of demand and supply which dictates it so that uh uh doesn't fundamentally

05:40change overnight and uh you know as uh you know as as this gst cut you know boost the demand basically

05:49it will lead to a change in dynamics but as of now we are very happy with this move and we've passed

05:54on all the price benefits to the customer yesterday night

05:57all right mr kandilwal with this we let you go thank you so much for taking the time out and

06:04speaking with us this morning pleasure is mine thank you so much all right so that was about what's in

06:10for the cement pack but the other sector that will be the key beneficiary of this whole

Cement Prices to Rise After GST Cut? Impact on Real Estate & Infra | Anuj Khandelwal | Business News

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