Cement makers to post better profits
An uptick in demand in north India followed by strong pricing discipline resulted in a rebound in cement prices to Rs 305-345 per cent bag in the first half of 2016-17 from Rs 225-240 a bag in January 2016, ratings agency ICRA said.
During April-September 2016-17, cement prices in the North were higher by around Rs 60-65 per bag, compared to the same period in 2015-16, ICRA said in a statement.
While production growth during April-August was higher at 4.4 per cent compared to April-August 2015 at 2.1 per cent, it still remains moderate, ICRA Senior VP Sabyasachi Majumdar said.
“This has been owing to a significant decline in the demand growth during April-May 2016 due to continued weak rural demand (especially in Maharashtra, which is facing a drought) and a slowdown in the pace of infrastructure execution, owing to unavailability of water,” he added.
“Demand growth during 2016-17 is likely to be driven by pick-up in the infrastructure segment, primarily road projects and the housing segment, during the next one year; this apart, there is a likelihood of a recovery in the rural demand from H2 FY-2017, given the expectations of a better monsoon,” Majumdar said.