+
ICRA revises cement growth outlook for FY22
Cement

ICRA revises cement growth outlook for FY22

ICRA has revised its cement volumetric growth outlook from 15% to 10-12% for FY22 as the second wave of Covid-19 has impacted domestic cement production in the first quarter of the financial year.

In April, cement production was 11% month-on-month (m-o-m) and decreased to 18% in May. It is not like the previous year when most urban areas got infected.

Notwithstanding the start of the monsoon, the expected pent-up demand to drive the volumes is the beginning of Q2 FY22.

The ICRA report said the production volumes of cement firms could take a hit this fiscal year; it is expected that the credit profile would remain constant and run by healthy cash generation and strong liquidity.

However, the increasing input prices could result in a decline in operating margins by nearly 300 bps.

Shree Cement, India Cement, UltraTech Cement, Bharathi Cement, Dalmia Cement, and Ambuja Cement are big cement companies in the domestic market.

About the road logistic sector, ICRA said due to the second wave, muted business performance over Q1 FY22 is likely to hold annual growth at 6-9%, compared to the last estimate of 10-12% for FY22.

The rating company is expecting the aggregate operating profit margins of logistic companies samples to be between 9-9.5% in FY22, against 9.9% in FY21.

ICRA said that the logistic capability of companies to increase freight rates would be essential to sustaining profitability in the near term.

Growth across the medium term would continue to run by demand from parts such as pharmaceuticals, industrial goods, e-commerce, FMCG, retail, and chemicals, linked with the paradigm shift of the industry towards organised logistics players, after the GST and E-way bill implementations.

Image Source


Also read: Cement industry to witness improved demand from July 2021

Also read: Cement prices in India improve, maximum hike in southern India

ICRA has revised its cement volumetric growth outlook from 15% to 10-12% for FY22 as the second wave of Covid-19 has impacted domestic cement production in the first quarter of the financial year. In April, cement production was 11% month-on-month (m-o-m) and decreased to 18% in May. It is not like the previous year when most urban areas got infected. Notwithstanding the start of the monsoon, the expected pent-up demand to drive the volumes is the beginning of Q2 FY22. The ICRA report said the production volumes of cement firms could take a hit this fiscal year; it is expected that the credit profile would remain constant and run by healthy cash generation and strong liquidity. However, the increasing input prices could result in a decline in operating margins by nearly 300 bps. Shree Cement, India Cement, UltraTech Cement, Bharathi Cement, Dalmia Cement, and Ambuja Cement are big cement companies in the domestic market. About the road logistic sector, ICRA said due to the second wave, muted business performance over Q1 FY22 is likely to hold annual growth at 6-9%, compared to the last estimate of 10-12% for FY22. The rating company is expecting the aggregate operating profit margins of logistic companies samples to be between 9-9.5% in FY22, against 9.9% in FY21. ICRA said that the logistic capability of companies to increase freight rates would be essential to sustaining profitability in the near term. Growth across the medium term would continue to run by demand from parts such as pharmaceuticals, industrial goods, e-commerce, FMCG, retail, and chemicals, linked with the paradigm shift of the industry towards organised logistics players, after the GST and E-way bill implementations. Image Source Also read: Cement industry to witness improved demand from July 2021 Also read: Cement prices in India improve, maximum hike in southern India

Next Story
Infrastructure Transport

Sumadhura Leases 5 Lakh Sq Ft in Bengaluru

Sumadhura Group, a prominent South Indian real estate developer, has leased over five lakh sq ft of prime commercial space at its flagship Sumadhura Capitol Towers in Whitefield, Bengaluru. The space has been taken up by leading global corporates and renowned retail brands, with the annual leasing revenue expected to reach Rs 500 million.The long-term leases have been signed by key players across sectors such as IT/ITeS, consulting, engineering, and artificial intelligence, reaffirming Capitol Towers’ status as a premium commercial destination in one of Bengaluru’s fastest-growing business..

Next Story
Infrastructure Transport

Konkan Railway Adds Extra Halt for Ro-Ro Car Service During Ganesh Festival

To improve accessibility during the upcoming Ganesh festival, Konkan Railway Corporation (KRCL) has announced an additional halt at Nandgaon Road for its newly introduced Roll-on/Roll-off (Ro-Ro) car transportation service between Kolad (Maharashtra) and Verna (Goa).The Ro-Ro car service, launched to enhance travel convenience along the coastal corridor, complements the long-running Ro-Ro truck service which has been operational since 1999. The added stop is expected to ease vehicular movement for passengers travelling to their hometowns during the festive season.News source: PTI ..

Next Story
Infrastructure Energy

Bihar Approves Rs 940.5 Mn Digital Plan, 2400 MW Project

To enhance access to quality education through digital means, the Cabinet approved the Mukhya Mantri Digital Library Yojana, under which digital library centres will be established in each of the state’s 243 assembly constituencies at an estimated cost of Rs 940.50 million.According to Additional Chief Secretary (Cabinet Secretariat) S. Siddharth, each centre will be set up in existing infrastructure such as panchayat buildings, municipal offices, community halls, and schools with minimum space of 300 sq ft. The libraries will be equipped with 10 computers, electricity, and high-speed intern..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?