Business

Cement demand set to rebound in 2nd half of FY25, likely to grow at 8 pc

October 14, 2024

New Delhi, Oct 14

Cement demand in India is likely to grow at a moderate pace of 7-8 per cent (year-on-year) to 475 million tonnes (MTs) this fiscal, after clocking a compound annual growth rate of 11 per cent between fiscals 2022 and 2024, according to a report on Monday.

Healthy monsoon, improved labour availability after the festive season, and pick-up in government spending on infrastructure and housing (under the Pradhan Mantri Awas Yojana) should drive demand up 9-11 per cent in the second half, taking the annual growth tally to 7-8 per cent, according to the report by CRISIL Ratings.

Despite the slow growth, operating profitability of cement players is likely to sustain at Rs 975-Rs 1,000 per tonne, above the decadal average of Rs 963 per tonne.

This, coupled with strong balance sheets, will keep credit profiles stable.

Sehul Bhatt, Director-Research, CRISIL Market Intelligence and Analytics said that cement demand is expected to rebound in the second half of this fiscal (which typically accounts for more than half of the annual sales), as construction activity gathers pace across infrastructure and housing segments post-monsoon.

India’s cement demand grew 3 per cent in the first quarter of this fiscal, owing to an extended heatwave and shortage of labour during general elections.

 

 

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