An analysis of profitability trend in Indian Cement Industry

In Indian manufacturing sector cement industry is one of the oldest and established one contributing a large share of total industrial production and employment. Unfortunately however, the industry has long been a victim of various regulatory measures taken by the government on its production and distribution from its time of commencement. These have worsened its competitive structure from the very beginning. The disadvantageous situation of a large number of companies is reflected in the haphazard movement of the industry’s profitability ratio. The industry is overburdened with different types of tax imposed by the government. Burden of unfavourable sales tax and excise duty, uncertainty in supply of raw materials, underutilization of capital and high capital cost added to the aforesaid fluctuation in profitability. The lower base of profitability ratios and the waning financial position of the majority of the companies have left them with little resources to undertake renovation and modernization. It is high time that some fiscal measures imposed by the government, together with a drive to modernization be effective for reconstructing the condition of Indian cement industry.