Cement demand may surpass 340 mt in FY22: ICRA
Cement

Cement demand may surpass 340 mt in FY22: ICRA

According to Investment Information and Credit Rating Agency (ICRA), the domestic demand for cement is expected to be the highest and is estimated to go past 340 million tonne (mt) in the financial year (FY) 2022, driven by sustained rural housing demand and a significant surge in infrastructure activity.

While the cement prices are expected to largely sustain at the recently increased levels supported by the improved demand, the higher input costs are likely to add pressure on operating margins during the fiscal, ICRA stated.

Though this is likely to result in some moderation in debt coverage metrics, they are likely to remain at healthy levels.

The improvement in the infrastructure market's construction activity will also support the cement demand, ICRA said.

Access the latest cement prices here

On the supply end, capacity additions are expected to be between 15-17 mt in FY2021 against the earlier estimates of around 20 mt due to the Covid-19 pandemic when demand is adversely impacted and the companies preserved liquidity.

The capex is likely to get back to around 22-25 mt in FY2022 and FY2023. The addition in eastern India is expected to lead the expansion and is expected to add around 20 mt followed by the central region at around 13 mt during FY22-FY23.

While in some regions like the east, the northeast, and the north, the cement players' utilisation is likely to be higher than the national average, in other regions such as the West and the South, the utilisation is likely to remain muted, given the past capacity overhang.

With the expected revival in demand in FY22, the utilisation levels are likely to improve to 63% on an expanded base. The capacity utilisation will remain moderate due to the significant capacities being added during the same period, especially in the eastern region.

Image Source


Also read: Cement prices to be hiked, as demand improves

Also read: Cement demand to sustain: India Ratings and Research

According to Investment Information and Credit Rating Agency (ICRA), the domestic demand for cement is expected to be the highest and is estimated to go past 340 million tonne (mt) in the financial year (FY) 2022, driven by sustained rural housing demand and a significant surge in infrastructure activity. While the cement prices are expected to largely sustain at the recently increased levels supported by the improved demand, the higher input costs are likely to add pressure on operating margins during the fiscal, ICRA stated. Though this is likely to result in some moderation in debt coverage metrics, they are likely to remain at healthy levels. The improvement in the infrastructure market's construction activity will also support the cement demand, ICRA said. Access the latest cement prices here On the supply end, capacity additions are expected to be between 15-17 mt in FY2021 against the earlier estimates of around 20 mt due to the Covid-19 pandemic when demand is adversely impacted and the companies preserved liquidity. The capex is likely to get back to around 22-25 mt in FY2022 and FY2023. The addition in eastern India is expected to lead the expansion and is expected to add around 20 mt followed by the central region at around 13 mt during FY22-FY23. While in some regions like the east, the northeast, and the north, the cement players' utilisation is likely to be higher than the national average, in other regions such as the West and the South, the utilisation is likely to remain muted, given the past capacity overhang. With the expected revival in demand in FY22, the utilisation levels are likely to improve to 63% on an expanded base. The capacity utilisation will remain moderate due to the significant capacities being added during the same period, especially in the eastern region. Image Source Also read: Cement prices to be hiked, as demand improves Also read: Cement demand to sustain: India Ratings and Research

Next Story
Infrastructure Urban

Six Bidders Vie for Rs 572 Bn Jaiprakash Associates

The scramble to rescue Jaiprakash Associates Ltd (JAL), the flagship of the debt-laden Jaypee Group, reached a decisive stage on Tuesday as the window for resolution plans shut with at least six suitors in the fray. Industry sources say Adani Enterprises, Vedanta Group, Dalmia Bharat, Jaypee Infratech (backed by the Suraksha Group), Jindal Power and PNC Infratech have all lodged bids. Jaypee Infratech confirmed its submission but declined to reveal details.Lenders will open and assess the offers at a Committee of Creditors meeting today. Although bid values remain under wraps, the National Ass..

Next Story
Infrastructure Urban

Delhi Orders Urgent MAMC Hostel Repair and Safety Upgrade

Delhi Chief Minister Rekha Gupta has instructed multiple departments to overhaul hostel infrastructure and enhance student safety at Maulana Azad Medical College (MAMC). Chairing a high-level meeting at the Delhi Secretariat with Public Works Department, Health officials and student representatives, the Chief Minister demanded immediate repairs to ageing hostel blocks, new high-intensity LED lighting, round-the-clock CCTV coverage and a larger security presence.She also ordered a special drive to clear illegal encroachments around the campus and fast-track plans for an additional hostel, delay..

Next Story
Infrastructure Transport

Vikaspuri Road Upgrade, Tree Drive to Boost Delhi Constituency

Delhi’s Health and Transport Minister Pankaj Kumar Singh has broken ground on the long-awaited Baprola Village–Harphool Vihar road while leading a record plantation of 501 saplings under the “Ek Ped Maa Ke Naam” campaign. He said the two initiatives reflect the capital’s “people-centric governance”, promising safer, faster and more dignified daily life for residents.The rebuilt thoroughfare will ease commutes for Baprola Village, G-2 Jai Vihar, Prashant Enclave, Bajrang Chowk and Harphool Vihar, directly benefiting an estimated three thousand to three thousand five hundred school..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?