Mumbai, April 13 -- Cement manufacturers in India are likely to witness a sharp decline in profitability in the current financial year as elevated energy costs weigh on margins, according to a report by Crisil Intelligence.

The report estimates that operating margins of cement companies will contract by 150-200 basis points (bps) year-on-year to 16-18 per cent this fiscal, reversing the 260-280 bps expansion seen in the previous year.

The decline is primarily attributed to a surge in energy prices triggered by geopolitical tensions in West Asia, which have significantly increased power and fuel expenses, a key cost component accounting for 26-28 per cent of total costs.

Crisil Intelligence noted that power and fuel costs are expected t...