Cement demand pick up not yet significant
With a rise in demand and prices, cement sector has been buzzing of late. To get the exact picture of the business outlook going forward, N Srinivasan, VC & MD, India Cements said although the demand for cement has not been significant yet, he is optimistic of seeing an increase in demand going forward. The demand for cement in FY17 was at 7 percent.
He said both – increase in volumes and prices are important for a cement industry – volumes to satisfy increasing demand and hike in prices, to help manage rising costs. He said although the costs have risen, the company is taking all the necessary steps to protect margins.
The invoice price of cement in Andhra Pradesh had gone up from Rs340 to Rs360 per bag but the real increase will be more because the cement was available below the invoice price for some time and that correction will improve the bottomline of cement companies.
Government’s focus on affordable housing and infrastructure spending has the potential to increase cement demand but it has not yet translated on ground, he said.
The company is also aiming to pare debt going forward. The interest paying debt is around Rs 2100 crore. However, he did not specify if they would look at selling some of the land bank to reduce their debt.