There is good news for cement industry as it is expected that the sale of cement is going to witness a rise in demand from realty sector and construction companies by 12 per cent to 20 million tones this month. As compared to the same period last year, the Sales for the building material grew by 11per cent in January and 4.3 per cent in February this year.
Photo by xdjioOn the last day of the current financial year, March 31, Cement companies are supposed to announce the sales data. “Our initial estimates show that March sales will be higher compared with the first two months of the current year,” said Mr. Rupesh Sankhe, Angel Securities Cement Analyst. He added that the sales could go up by 12 per cent in March.
The increased sales in March can be accounted to high inventory levels from the month of February, the analysts say. “There was a shortage of wagons last month and many companies were unable to deliver the commodity to retailers,” Sankhe said.
The major players of Cement industry like Aditya Birla, Jaiprakash Associates, Dalmia, JK Lakshmi and Shree Cements, registered high growth last month and are expected to grow this month too keeping in mind the higher consumption. It is interesting to note that these 5 companies together account for almost half of India’s total cement capacity of 240 million tones.
“Demand for cement is robust and the industry will see healthy growth in March, said Mr. Hari Mohan Bangur, Managing Director of Shree Cement. He added that the growth rate will continue as long as there are no dampening factors.
Apart from the recovery in realty sector, analysts say a sharp increase in sale of cement can also be due to the government’s focus on infrastructure in the five year plan.
Thus the cement industry can only expect profits in the near future.