The cement demand is expected to grow by 7-8 per cent to around 382 million metric tonnes in the current fiscal, helped by tailwinds of strong demand from rural housing and infrastructure sectors, a report by ICRA said on Wednesday.
It also mentioned about "likely contraction in operating margins by 270-320 bps to 16.8-17.3 per cent" for the industry on account of high input costs and inflationary pressure.
The cement production in the first 11 months of FY22 was at 323 million MT, which is higher by 22 per cent Y-o-Y. The demand, which was adversely impacted in November 2021 due to cyclones and unseasonal rains, picked up from December 2021.
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ICRA estimates "the production to grow by around 18-20 per cent and surpass pre-Covid levels to reach around 355 million MT in FY2022."
The recent budgetary allocation of over Rs 9.2 lakh crore towards agriculture, affordable housing, and capital expenditure is expected to augur well for cement demand, ICRA AVP, Sector Head Anupama Reddy said.
"The cement demand is expected to grow by 7-8 per cent to around 382 million MT in FY2023 supported by strong demand from rural housing and infrastructure sectors," she added.
India is the second-largest cement producer after China.
According to the data from the Cement Manufacturers Association (CMA), India has an installed capacity of approximately 545 million MT.
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