A recovery in demand on the back of a good monsoon this year and low capacity additions are likely to reflect in the earnings of cement companies, leading to a re-rating of shares of these firms, according to a Deutsche Bank sector note.
The country´s eastern region will account for close to one-third of the new cement production capacity over the next two fiscals. Of the total 46.7 mn tonne of new capacity due to come up over this period, the eastern region will contribute 32 per cent, to be followed by the northern region at 23 per cent. In the past two years, there was no capacity addition in the eastern part, which recorded capacity utilisation in the range of 75-80 per cent. Over the next two fiscals, large cement companies
As the formation of separate Telangana state out of Andhra Pradesh seems to be imminent, cement companies expect to garner about one lakh crore rupees worth business in the proposed new state. The cement companies say the new state will require to build a new capital of its own comprising a legislature house, secretariat, high court, housing facilities for government employees and other constructions.
In the cartelisation case of cement companies, the Competition Appellate Tribunal (COMPAT) was scheduled to resume its hearing on March 13 over a batch of petitions filed by cement firms seeking stay on Rs 6,307-crore penalty imposed by fair trade regulator CCI on the grounds of cartelisation.