{"id":1644,"date":"2021-07-24T20:08:22","date_gmt":"2021-07-24T14:38:22","guid":{"rendered":"https:\/\/flattrade.in\/kosh\/?p=1644"},"modified":"2023-01-11T08:22:44","modified_gmt":"2023-01-11T02:52:44","slug":"an-overview-of-cement-industry-in-india","status":"publish","type":"post","link":"https:\/\/flattrade.in\/kosh\/an-overview-of-cement-industry-in-india\/","title":{"rendered":"An Overview of Cement Industry in India"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1644\" class=\"elementor elementor-1644\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1c36903 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1c36903\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b8a313d\" data-id=\"b8a313d\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-acb38c1 elementor-widget elementor-widget-text-editor\" data-id=\"acb38c1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><\/p>\n<p>Indian cement industry is part of the eight core industries, which are closely linked to the nation&#8217;s economy and benefit immensely when the economy recovers or is on an upward trajectory. Likewise, the cement industry gets affected during an economic downturn. So, the <br>sector is cyclical.<span style=\"font-size: 16px;\">&nbsp;<\/span><\/p>\n<p>For a developing economy like India, which is at an inflection point with increasing urbanisation and government&#8217;s impetus in improving the country&#8217;s infrastructure, cement industry and companies in the sector hold immense potential. Many companies are ramping <br>up their capacity to produce more cement to meet expected higher demand in the future. <br><br>India is already the second largest producer of cement in the world, second only to China. India commands 7% of the total installed capacity in the world. The country produced about 329 million tonnes (MT) of cement in FY20 and its production is forecasted to touch 381 MT in the fiscal year 2022. Currently, India\u2019s capacity to produce cement is more than 500 MT.<br><span style=\"font-size: 16px;\"><br>This production capacity is only going to rise in the future as many cement companies are on&nbsp;<\/span><span style=\"font-size: 16px;\">an expansion spree, which are evident from a lot of news reports. For instance, country\u2019s&nbsp;<\/span><span style=\"font-size: 16px;\">largest cement producer UltraTech Cement recently announced an investment of Rs 5477&nbsp;<\/span><span style=\"font-size: 16px;\">crore to increase its total production output to 136 MT per annum. Other smaller players like&nbsp;<\/span><span style=\"font-size: 16px;\">Ramco Cements, JK Cements and Ambuja are also eagerly scaling up their production&nbsp;<\/span><span style=\"font-size: 16px;\">capacity.<\/span><\/p>\n<p>However, credit rating agency ICRA in its recent report said cement production in April and May fell 11% and 18%, respectively, due to lockdown restrictions and less activity. It also revised volume growth rate to 10% to 12% in FY22, from earlier estimation of 15%. It also <br>said the financial strength of cement companies are expected to remain stable, given their healthy liquidity condition and positive cash flow.<\/p>\n<p><span style=\"font-size: 16px;\">Another report from India Ratings (Ind-Ra) said cement volumes improved sequentially by&nbsp;<\/span><span style=\"font-size: 16px;\">about 20% in June as lockdown restrictions eased and on higher demand. The report said&nbsp;<\/span><span style=\"font-size: 16px;\">continued rise in input costs due to higher prices in pet coke, coal and diesel prices are likely&nbsp;<\/span><span style=\"font-size: 16px;\">to have a moderate impact on EBITDA\/MT measure in Q1 of FY22.<\/span><\/p>\n<p>The report added that there was a significant release of working capital in FY21 for cement companies, driven by higher payables and lower inventory. Though the sector\u2019s net working capital declined to 5% of its sales in FY21, the sector\u2019s working capital situation is expected to improve, helped by revenue growth and decrease in payables.<\/p>\n<p>Meanwhile, a leading investment group CLSA said in its report that they expected demand to grow higher than real GDP, led by strong housing development and infrastructure push. It estimated the cement sector\u2019s EBITDA to have a 15% CAGR from FY21 to FY24. It also <br>projected volume to grow at 9% CAGR and profit 5% over FY21-24.<\/p>\n<p>All these positive outlook augurs well for cement companies and we will discuss a few companies, which are likely to benefit in the next blog. <br><br><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"Indian cement industry is part of the eight core industries, which are closely linked to the nation&#8217;s economy&hellip;","protected":false},"author":5,"featured_media":1648,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"csco_display_header_overlay":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"csco_post_video_bg_volume":false,"footnotes":""},"categories":[65],"tags":[67,70],"class_list":{"0":"post-1644","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-industry","8":"tag-overview","9":"tag-ultratech","10":"cs-entry","11":"cs-video-wrap"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - 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