MUMBAI, November 27: Some of the largest market-cap cement companies have been suddenly perked up by a whopping 21.6 per cent year-on-year despatch growth in October and a 18 per cent output rise.

The output performance of 6.44 million tonnes is the first light at the end of one of the worst recessionary tunnels in the industry's history. At 6.35 million tonnes, the significantly higher despatch is the first signal of revival from a crushing sales-squeeze.

Both production and despatches had shown negative growth since June with only September showing a slim increase.

But while more volumes are being pushed into the market, with the end of monsoons, price realisation remains at rock bottom.

In year-on-year terms, prices have fallen by more than seven per cent, and there are no signs of prices rising in near future, say senior industry sources.

All the five largest cement makers -- ACC, Larsen & Toubro, Grasim, Gujarat Ambuja, Indian Rayon -- are high-turnover specified group scrips. Barring Gujarat Ambuja, all of them have declared dragged-down first-half results in a tough year.

But the sudden spurt has left the market agog with probabilities of volumes-led better second-halves from the cement leaders.

"The next two months will give a clearer indication as to how the year will end," said a marketing chief of a cement major.

"Cement prices remain sluggish in all the markets barring south. The eastern markets have been the worst hit," he added. The average prices in the eastern markets are now at around Rs 125 per 50 kg bag.

The average ruling prices in the other markets are Rs 145 in the west, Rs 130-135 in the north, and in the Rs 140-155 region in the south.

October despatches have been higher than that in September by 11.7 per cent, while production has been higher by 15.4 per cent.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.