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Cement firms’ profitability to go up in current fiscal: CARE

NEW DELHI: The profitability of domestic cement makers is likely to improve in the current fiscal on higher realisation due to improved price, rating agency CARE Ratings today said in a report.

“Though there may be partial reversal in cement price hikes in the near term due to monsoon impact, the average cement price during FY’15 is expected to be higher as compared with FY’14,” it said.

Last fiscal was a challenging year for cement industry due to pressure on realisation coupled with increased costs.

Cement makers raised the price of the building material in the last quarter of 2013-14 and in the first quarter of the current fiscal.

CARE said this will lead to higher realisation for them despite the fact that the average freight cost may be higher than FY’14 on account of increased diesel and rail freight rates.

“Higher realisations …are expected to not only negate the impact but also result in improved profitability margins on year-on-year basis,” it said.

Cement demand witnessed just 3.5 per cent growth in FY’14 compared to 5.3 per cent in FY’13 and 6.7 per cent in FY’12, mainly due to slowdown in infrastructure, industrial and real estate projects.

“Consequently, cement prices remained under pressure for major part of the year. Though few attempts to increase the prices by the cement companies were made during the year, the hikes were reversed most of the times till Q3 FY’14,” it said.

On an overall basis, the cement sector witnessed margin pressure during FY’14.

Xiaomi president says chip shortage has increased costs, may pass on to consumers

Chinese smartphone maker Xiaomi’s president Wang Xiang said on Wednesday that the global chip shortage was increasing the company’s costs and implied that in some cases the prices of its products might rise as a result.

“We will continue to optimize the costs of our hardware devices, that’s for sure,” he said during the company’s fourth quarter earnings call.

“To be honest, we will do our best to offer the best price we can to consumers. But sometimes, we may have to pass part of the cost increase to the consumer in different cases.”

A shortage in computer chips has rocked the electronics industry since late last year, as factors such as COVID-19, sanctions against key Chinese technology companies, and poor anticipation of demand all converged to upend the semiconductor supply chain.

While originally concentrated in the automotive industry, the shortage has expanded to affect all types of chips in a range of hardware products, including smartphones.

Qualcomm Inc, a key supplier to Xiaomi, is struggling to meet orders for major smartphone brands, Reuters reported earlier this month

“We are feeling pressure, but we are looking okay,” Wang added, speaking to investors.

The company reported a year-on-year revenue increase of 24.8% in the fourth quarter, hitting 70.5 billion yuan ($10.8 billion), while adjusted net profit rose 36.7% to 3.2 billion yuan.