FCC

Cement demand is seen rising 8-9% in FY24

2023-04-21

Government efforts to build infrastructure will continue to be strong.

Demand will increase this fiscal year by 8–9% on top of a 9% gain in FY22, which will aid in the sector's return to profitability, according to research.

According to India Ratings, which has a neutral outlook for the sector for the year, the sector will remain strong despite the substantial investment pipeline thanks to a recovery in profitability despite inflationary pressure and stable balance sheets.

According to the agency, demand would increase by 8–9% in FY24 compared to a projected 9% increase in FY23, giving the industry a five-year compounded annual growth rate of 4.5%.

Even though the industry is anticipated to raise prices only by a small percentage, softening gasoline costs will help operational margins recover. The agency anticipates operating margins to increase to Rs 950–1,000/MT in FY24 as a result of falling fuel and power prices. However, a spike in the price of coal and petcoke could have negative consequences