| TITLE |
A Study on Futures Contracts with Reference to Risk Management and Price Volatility in the Indian Cement Industry |
| ABSTRACT |
The cement industry plays a pivotal role in infrastructure development and economic growth, yet it is highly exposed to price volatility arising from fluctuations in raw material costs, energy prices, transportation expenses, seasonal demand variations, and macroeconomic uncertainty. Such volatility directly affects profitability, operational planning, and investment decisions of cement manufacturers, traders, and institutional investors. Futures contracts have emerged as an effective financial instrument for hedging price risks and ensuring price stability through predetermined settlement mechanisms. This study examines the role and effectiveness of futures contracts in managing price risks in the Indian cement industry. Using secondary market data from selected cement companies—Grasim Industries, Shree Cement, India Cements, Ambuja Cements, and UltraTech Cement—along with generated analytical metrics, the research evaluates payoff structures, intrinsic value, and profit/loss behavior over a three-month futures contract period. Statistical techniques such as descriptive analysis, volatility measurement, and comparative profitability assessment are employed. The findings indicate that futures trading significantly reduces downside risk, improves predictability of returns, and enhances strategic risk management. The study concludes that systematic adoption of futures contracts can stabilize revenue streams and improve financial resilience for cement companies and investors. |
| AUTHOR |
Jayanthi, Dr. B Vasantha Lakshmi
Assistant Professor, Department of MBA, CMR Technical Campus, Hyderabad, India
Associate Professor, Department of MBA, CMR Technical Campus, Hyderabad, India |
| PUBLICATION DATE |
2026-03-29 20:05:38 |
| VOLUME |
14 |
| ISSUE |
1 |
| DOI |
DOI: 10.15662/IJMSERH.2026.1401035 |
| PDF |
pdf/2026/1/35_A Study on Futures Contracts with Reference to Risk Management and Price Volatility in the Indian Cement Industry.pdf |
| KEYWORDS |
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