Cement volumes likely to grow by 7-8% on all-round demand: ICRA
Cement

Cement volumes likely to grow by 7-8% on all-round demand: ICRA

Cement volumes are expected to grow by 7-8% in FY2023 to around 388 million tonnes, aided by demand from housing, both rural and urban, and the infrastructure sector, according to an ICRA analysis. The demand for rural housing is supported by a robust rabi harvest and better crop realisation. The progress of kharif sowing, amidst a modest hike in MSPs of such crops for the upcoming marketing season, would determine farm sentiments going forward.

In the infrastructure segment, the significant increase of 24% in capital expenditure to Rs 7.5 trillion in the FY23 budget estimates over FY2022 revised estimates, led by Rs 1.8 trillion for roads and Rs 1.4 trillion for railways, augurs well for cement demand.

On urban housing, the report says that notwithstanding potential challenges due to increasing interest rates, the growth in employee headcounts and salaries for many IT/ITES companies, and demand for better and larger homes on account of the shift to the hybrid working model in customer segments working in IT/ITES, BFSI and related sectors is likely to support demand going forward.

However, the elevated input costs are likely to adversely impact operating margins, which are expected to be the lowest in the last seven years.

See also:
How developers and contractors can respond to rising cement costs
Ambuja Cements’ Q2CY22 revenue up 15


Cement volumes are expected to grow by 7-8% in FY2023 to around 388 million tonnes, aided by demand from housing, both rural and urban, and the infrastructure sector, according to an ICRA analysis. The demand for rural housing is supported by a robust rabi harvest and better crop realisation. The progress of kharif sowing, amidst a modest hike in MSPs of such crops for the upcoming marketing season, would determine farm sentiments going forward. In the infrastructure segment, the significant increase of 24% in capital expenditure to Rs 7.5 trillion in the FY23 budget estimates over FY2022 revised estimates, led by Rs 1.8 trillion for roads and Rs 1.4 trillion for railways, augurs well for cement demand. On urban housing, the report says that notwithstanding potential challenges due to increasing interest rates, the growth in employee headcounts and salaries for many IT/ITES companies, and demand for better and larger homes on account of the shift to the hybrid working model in customer segments working in IT/ITES, BFSI and related sectors is likely to support demand going forward. However, the elevated input costs are likely to adversely impact operating margins, which are expected to be the lowest in the last seven years.See also: How developers and contractors can respond to rising cement costsAmbuja Cements’ Q2CY22 revenue up 15

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