Credit rating agency, ICRA in its latest report has said that cement production in India registered a growth of 6.3 percent at 298 million tonne (MT) in the financial year 2018, as compared to 280 MT in FY17, with the bulk of production growth was reported in the second half of FY18. It noted that the growth in output was mainly because of better demand in the key markets and the base effect of the demonetisation-driven low demand during the corresponding period of last year.
Rating agency has stated that going by the prevalent trend, the growth momentum is expected to continue in FY19 and the industry is likely to witness a growth of around 6 percent. It pointed out that this is primarily on the back of pick-up in the affordable and rural housing segments and infrastructure - primarily road and irrigation projects. Besides, it said that the FY19 budget also provides support in this direction with higher rural credit, increased allocation for rural, agricultural and allied sectors along with continued focus on the PMAY and infrastructure investments.
The report further indicated that the cement production increased by 10.6 percent and 18.2 percent respectively in the December and March quarters of 2017-18. It said that the trend was supported by demand in Andhra Pradesh and Telangana, driven by irrigation, low-cost housing and infrastructure projects. Besides, it noted that in April 2018, rising demand resulted in an increase in cement prices in the Ahmedabad and Hyderabad markets respectively by Rs 20/a bag and Rs 10/a bag, respectively. However, it said that rising supplies resulted in prices remaining range-bound in the Kolkata market.