Ratings agency Icra has said cement demand may de-grow by up to 25 percent in current financial year (FY21) on account of the coronavirus lockdown and subsequent specific restrictions disrupting construction activities. It further said cement manufactures may witness a compression in operating profitability by 150-200 basis points (bps) in FY21.
However, it stated that despite the expected decline in demand, cement prices are likely to remain stable or get only marginally corrected. According to Icra Ratings Assistant Vice President Anupama Reddy, demand offtake effectively dried up during the lockdown period of close to 40 days.
She added with the lockdown being extended with varying forms and severities across different regions, the demand has seen a sharp correction in Q1 FY2021. The demand is likely to recover only from H2 FY2021 post monsoons.
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