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05-Dec2017

Cement demand likely to register modest growth in FY18: ICRA

Domestic credit rating agency, ICRA in its latest report has forecasted that India's cement demand is likely to register a modest growth of 1% in the financial year 2017-18, on the back of pick up in the housing segment both affordable and rural housing and; infrastructure segment, mostly road and irrigation projects.

According to the report, the cement offtake has continued to remain weak in the first half of the financial year (H1 FY18) and also in the month of October, owing to factors such as weak real estate activity, sand shortage and Goods and Services Tax (GST) implementation issues. ICRA also said that new project announcements from the private sector continue to remain weak and revival of public-private partnership is crucial to improve the pace of infrastructure development.

During seven months of FY18, the cement production reported de-growth of 1.6% to 165.6 million MT as compared to 168.3 million MT during 7M FY17. Besides, production declined by 3.3% in Q1 FY18 and by 0.4% in Q2 FY18 on a Y-o-Y basis. Demand during Q1 FY18 was adversely impacted due to various local issues across regions - in the North (especially in the states of UP and Punjab) the off-take was impacted by sand shortage and labour unavailability, while in the West the implementation of the Real Estate Regulatory Authority (RERA) Bill resulted in construction activity slowing down.


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