With the government push to rural housing, the cement industry witnessed double-digit growth after a gap of nine years in the just concluded financial year. Among others, the growth has helped bridge demand-supply gap. But a repeat is unlikely in the current financial year, say cement manufacturers and market watchers. Since there is no official data collected, companies and rating agencies put cement volume growth in the range of 12 to 13 percent for 2018-19. The industry is in its up cycle with double-digit volume growth for the full year, the first time since 2010, claimed the country's largest cement maker UltraTech, in a recent statement. Full-year volumes for UltraTech alone have grown at 21 percent, higher than the industry average, as its nearest competitor in cement capacity rankings, Holcim-controlled ACC and Ambuja Cements, have failed to keep pace with the industry's volume growth. The South Indian market in states like Andhra Pradesh and Telangana saw high demand and Tamil Nadu bounced back as the sand ban was lifted, said Nitin Bhasin, head of research, institutional equities at Ambit Capital. In East India, rural housing demand was high, pushed by the government's housing subsidy schemes.‖ JK Lakshmi saw a 36 percent jump in net profit to ₹44.40 crore for the March 2019 quarter. Volume growth has helped negate the cost rise, when prices have been weak and hence helped profit earning, said Shailendra Chouksey, whole-time director at JK Lakshmi. Ambuja reported a 2.4 percent growth in volumes and six percent for the full year, and in the March quarter, ACC reported a 5 percent growth in volumes and eight percent volume growth for the full year. Analysts, believe rural housing and demand coming from the Pradhan Mantri Grameen Vikas Yojana contributed to this growth and that the double-digit trend will continue in FY20 as well.
📅Published on:
28 May 2019
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