🤯 Have you seen our AI stock pickers’ 2024 results? 84.62%! Grab November’s list now.Pick Stocks with AI

Cement demand set to rebound in 2nd half of FY25, likely to grow at 8 pc

Published 14-10-2024, 07:35 pm
© Reuters.  Cement demand set to rebound in 2nd half of FY25, likely to grow at 8 pc
CRSL
-

New Delhi, Oct 14 (IANS) Cement demand in India is likely to grow at a moderate pace of 7-8 per cent (year-on-year) to 475 million tonnes (MTs) this fiscal, after clocking a compound annual growth rate of 11 per cent between fiscals 2022 and 2024, according to a report on Monday.Healthy monsoon, improved labour availability after the festive season, and pick-up in government spending on infrastructure and housing (under the Pradhan Mantri Awas Yojana) should drive demand up 9-11 per cent in the second half, taking the annual growth tally to 7-8 per cent, according to the report by CRISIL (NS:CRSL) Ratings.

Despite the slow growth, operating profitability of cement players is likely to sustain at Rs 975-Rs 1,000 per tonne, above the decadal average of Rs 963 per tonne.

This, coupled with strong balance sheets, will keep credit profiles stable.

Sehul Bhatt, Director-Research, CRISIL Market Intelligence and Analytics said that cement demand is expected to rebound in the second half of this fiscal (which typically accounts for more than half of the annual sales), as construction activity gathers pace across infrastructure and housing segments post-monsoon.

India’s cement demand grew 3 per cent in the first quarter of this fiscal, owing to an extended heatwave and shortage of labour during general elections.

It is estimated to have grown at a similar pace in the second quarter as well owing to seasonal weakness. However, second half is likely to bode well for the sector, said the report.

The report further stated that growth in housing segment, which accounts for 55-60 per cent of cement demand, will see a likely revival in rural housing demand supported by the healthy monsoon this year.

Similarly, government spending on infrastructure development, which accounts for 30 per cent of cement demand, will support demand too.

Power and fuel cost (30 per cent of total production cost) could decrease Rs 135-145 per tonne this fiscal as average coal/pet coke prices have declined and are currently stable, the report noted.

--IANS

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.