Displaying items by tag: India Ratings and Research

India: India Ratings and Research has forecast a drop of cement demand of 10 – 15% in the 2021 financial year due to coronavirus lockdowns in some states and flooding in eastern and central regions in the second quarter, according to the Economic Times newspaper. The research report attributed this to oversupply of cement in eastern regions. It also added that companies with more rural markets were likely to benefit from a quicker recovery.

India: Production capacity utilisation in the cement industry is expected to remain below 70% in the 2020 – 2021 financial year due to new plant projects in the next two years. Credit ratings agencies ICRA, India Ratings and Crisil all forecast relatively low demand for cement compared to a decade-high of 13% in the 2019 – 2020 period, according to the Press Trust of India. Cement production rose by 0.7% year-on-year in the first nine months of 2019 – 2020 period. However, production growth has hastened since then. The ratings agencies offer different outlooks on anticipated profits look forward.

India: The India Ratings and Research has blamed demonetisation and elections for a poor fourth quarter for cement producers in the 2017 Indian financial year. Cement production volumes fell by 15.8% year-on-year in February 2017 and by 5% on a month-on-month basis. India Ratings also attributed the decline to a strong equivalent quarter in the 2016 financial year.

It reported that volumes for the major cement producers contracted by 5% year-on-year in the third quarter. On a regional basis it fell by 3% and 6% for producers in central and northern regions. However, volumes rose sharply, by 21%, in the south. Growth in the southern region has been supported by increases in government spending in the states of Andhra Pradesh and Telangana.

The agency also reported that changes announced by the Ministry of Railways, which requires long-term agreements and contracts for industries like cement, steel and fertilisers, could potentially drive demand for cement. The new policy will provide conditional discounts that could increase the transport of cement through the rail network and cement manufacturers will be able to control freight costs more effectively. However, the availability of wagons during peak periods might also constrain the policy.

India: The India Ratings and Research credit agency predicts that the cement industry will grow by 4 – 5% in the 2017 – 2018 financial year due to demand from infrastructure activities and a revival in housing demand in rural areas led by government spending. In a report it has revised downwards its growth estimates for the 2016 – 2017 period to 3 – 3.5% from 4 – 6% due to the negative effects of demonetisation. It added that, although the price of petcoke and coal has almost doubled since September 2016, it expects that stable cement demand will allow producers to pass these costs onto consumers in the 2017 – 2018 period.

Cement producers will add 50Mt/yr additional production capacity in the 2016 – 2018 period with the eastern region leading growth at 17Mt/yr followed by the north at 14Mt/yr. However, it fears that capacity increases in these regions may outpace demand. India Ratings said that the country’ cement production capacity utilisation rate was 70% in the 2015 – 2016 period and that it was likely to decrease to 65% following the effects of demonetisation. It is expected to rebound back to 70% in the next financial year.

India: The India Ratings and Research credit ratings agency has said that demonetisation of the economy is likely to reduce growth in the cement industry by 2% to 4% in the 2016 – 2017 financial year that ends on 31 March 2017. Previously it had predicted growth of up to 6% in this period. The agency reported that cement production grew by 0.5% in November 2016 following rates of 5.5% and 6.2% in September and November 2016 respectively. It added that all India volumes fell by up to 25% in November and December 2016. The agency expects demand for cement from the housing sector will to decline further from its current contribution of 65% of all demand.