+
Cement demand to recover soon for construction industry
Cement

Cement demand to recover soon for construction industry

With the commencement of the construction season this year, cement demand and price recovery are expected in the coming months.

According to the Emkay Research report, the input prices of cement have seen moderation, and a sustainable improvement in demand and price is crucial for profitability in the cement sector.

During the second quarter (Q2)of FY22, higher prices of cement affected the domestic cement players, with an 11% year-on-year (YoY) drop and 17% sequential drop in earnings before interest, taxes, depreciation and amortisation (EBITDA) per tonne.

The cement volumes had dropped during October and November in 2021 due to the surge in monsoon season across the country and a sharp decline in volumes in the East region.

According to the JM Financial report, a 9% compound annual growth rate (CAGR) is expected during FY22-24 and limited supply growth of 13% over FY22-24.

According to ICICI Securities, nearly 60% of the 42 million tonnes (mt) clinker and over 80 mt cement capacities will be added in the East and central regions in FY22-24.

Nearly 30% of the cement capacities are to be added by the end of FY23 and expects to see growth from FY24, while another 30% of capacities will get commissioned in FY24.

The pipeline capacity has increased by 27%, against 14% for large peers is expected to drive growth and market shares while lowering regional concentration risk.

UltraTech Cement will continue to grow business and profitability in FY21-24E backed by low-cost brownfield expansion projects and increased cost efficiencies.

It has planned to expand 20 mt capacities in the next two to three years in high-growth utilisation markets of East, North and Central India to ensure fast ramp-up and higher volumes.

Image Source

With the commencement of the construction season this year, cement demand and price recovery are expected in the coming months. According to the Emkay Research report, the input prices of cement have seen moderation, and a sustainable improvement in demand and price is crucial for profitability in the cement sector. During the second quarter (Q2)of FY22, higher prices of cement affected the domestic cement players, with an 11% year-on-year (YoY) drop and 17% sequential drop in earnings before interest, taxes, depreciation and amortisation (EBITDA) per tonne. The cement volumes had dropped during October and November in 2021 due to the surge in monsoon season across the country and a sharp decline in volumes in the East region. According to the JM Financial report, a 9% compound annual growth rate (CAGR) is expected during FY22-24 and limited supply growth of 13% over FY22-24. According to ICICI Securities, nearly 60% of the 42 million tonnes (mt) clinker and over 80 mt cement capacities will be added in the East and central regions in FY22-24. Nearly 30% of the cement capacities are to be added by the end of FY23 and expects to see growth from FY24, while another 30% of capacities will get commissioned in FY24. The pipeline capacity has increased by 27%, against 14% for large peers is expected to drive growth and market shares while lowering regional concentration risk. UltraTech Cement will continue to grow business and profitability in FY21-24E backed by low-cost brownfield expansion projects and increased cost efficiencies. It has planned to expand 20 mt capacities in the next two to three years in high-growth utilisation markets of East, North and Central India to ensure fast ramp-up and higher volumes. Image Source

Related Stories

Gold Stories

Next Story
Products

Interio by Godrej launches modular workplace solutions

Interio by Godrej has launched Workscapes, a modular workplace solutions category designed to help organisations configure and adapt workspaces to changing requirements. The portfolio combines mobile and compatible furniture and support elements that can be rearranged across different work modes without changes to fixed layouts.Workscapes includes Collaboration Tables, Privacy Solutions, Mobile Markerboards and Space Dividers, Power Solutions, Storage and Support Elements, Meeting and Presentation Tools, and Seating Elements. The range is designed for focused work, collaboration, informal disc..

Next Story
Infrastructure Urban

CAFE-III Gives Auto Industry Investment Clarity

The government’s new Corporate Average Fuel Economy (CAFE-III) norms have provided the automobile industry with a clearer framework for technology investments, according to industry representatives. The framework seeks to balance environmental objectives with flexibility for manufacturers while encouraging the adoption of flex-fuel vehicles and biofuels. Society of Indian Automobile Manufacturers (SIAM) President Shenu Agarwal said the five-year framework would give automakers greater predictability to plan investments and accelerate innovation. He said the regulation established annual targ..

Next Story
Infrastructure Energy

Mines Ministry to Auction Two Offshore Mineral Blocks in Andaman Sea

The Ministry of Mines will launch an auction of two offshore mineral blocks in the Andaman Sea on Thursday, seeking to unlock India’s offshore mineral potential and strengthen long-term mineral resource security. The blocks will be offered under a composite licence, which permits exploration and development activities in accordance with the applicable regulatory framework. The ministry said the auction was intended to encourage systematic exploration, attract investment and promote the use of advanced technologies for offshore mineral exploration and development. The initiative is also aimed..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code