Crisil Intelligence in its latest report has said that the cement sector is expected to see a 6.5-7.5 per cent demand growth this fiscal driven by a 10 per cent rise in budgetary allocation for core infrastructure ministries and on expectation that an above-normal monsoon will boost agricultural profitability, in turn lifting rural housing demand.
It stated in fiscal 2025, cement demand growth was moderate at 4.5-5.5 per cent owing to a sluggish start to the year because of the general elections, spatially well-distributed monsoon that impacted construction along with high base of past three fiscals. Weak state government spending in the first half also slowed pace of project execution and a slow real estate market impacted urban housing. Infrastructure, which accounts for 29-31 per cent of the domestic cement demand, is expected to remain a key demand driver in the current fiscal too. Within infrastructure, roads have been the largest contributor, followed by railways, irrigation and urban infrastructure.
Sehul Bhatt, Director, Crisil Intelligence, said ‘Notably, budgets of 12 states, accounting for 63-65 per cent of Indian cement demand, reveal a substantial 11 per cent increase in total allocations for the current fiscal. Furthermore, the government’s emphasis on establishing specialised rail corridors for the energy, mineral and cement industries, along with initiatives to promote tourism, is expected to bolster demand. The enhanced investment is expected to stimulate cement demand, driving growth of 7.5-8.5 per cent from the infrastructure sector.’
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