The nationwide lockdown due to the COVID-19 pandemic would adversely impact cement demand in the first quarter of FY2020-21 (Q1 FY21) with the construction activity coming to a halt, according to ICRA. The normalisation of construction activity could take some time post the lockdown.

ICRA expects the cement dispatches to decline by around 10-12 per cent in FY2021 on a year-on-year basis. Despite cracks in demand, cement prices are likely to get only marginally corrected, and with the support of benign input costs, the compression in operating profitability could be limited to 200-250 bps in FY2021. Cement offtake witnessed healthy growth in January and February by 5 per cent and 8.6 per cent YoY respectively, while it was affected in mid-March.