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Cement sector has started to gear up for upturn

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Nirmal Bang, a research firm, has stated that the cement sector has gradually started to gear up for the cyclical upturn in the next two years.The key reasons behind its view are narrowing demand-supply gap (incremental demand of 38 mt and slowdown in incremental capacity with effective addition of 25mt), likely improvement in effective capacity utilisation to 80 per cent by FY14E and moderation in cost inflation. All this would lead to improvement in operating profit and a re-rating of the valuation multiple.Hence, investors should accumulate cement stocks in order to derive the benefits from upturn in the cement cycle. The company initiate coverage on six companies in the cement universe with a buy rating on Ambuja Cement, ACC, Grasim Industries, India Cements and Shree Cement and a hold rating on UltraTech.The company said that in FY08-12, the cement industry’s installed capacity increased by 140 mt and incremental demand increased by just 55 mt. This led to an unfavorable demand-supply scenario and effective capacity utilisation rate declined from 96 per cent in FY09 to 76 per cent in FY12.

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Concrete

CCU testbeds in Tamil Nadu

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Tamil Nadu is set to host one of India’s five national carbon capture and utilisation (CCU) testbeds, aimed at reducing CO2 emissions in the cement industry as part of the country’s 2070 net-zero goal, as per a news report. The facility will be based at UltraTech Cement’s Reddipalayam plant in Ariyalur, supported by IIT Madras and BITS Pilani. Backed by the Department of Science and Technology (DST), the project will pilot an oxygen-enriched kiln capable of capturing up to two tonnes of CO2 per day for conversion into concrete products. Additional testbeds are planned in Rajasthan, Odisha, and Andhra Pradesh, involving companies like JK Cement and Dalmia Cement. Union Minister Jitendra Singh confirmed that funding approvals are underway, with full implementation expected in 2025.

Image source:https://www.heavyequipmentguide.ca/

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Concrete

JSW Cement gears up for IPO

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JSW Cement has set the price range for its upcoming initial public offering(IPO) at US$1.58 to US$1.67 per share, aiming to raise approximately US$409 million. As reported in the news, around US$91 million from the proceeds will be directed towards partially financing a new integrated cement plant in Nagaur, Rajasthan. Additionally, the company plans to utilise US$59.2 million to repay or prepay existing debts. The remaining capital will be allocated for general corporate purposes.

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Concrete

Cement industry to gain from new infrastructure spending

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As per a news report, Karan Adani, ACC Chair, has said that he expects the cement industry to benefit from the an anticipated US$2.2tn in new public infrastructure spending between 2025 and 2030. In a statement he said that ACC has crossed the 100Mt/yr cement capacity milestone in April 2025, propelling the company to get closer to its ambitious 140Mt/yr target by the 2028 financial year. The company’s capacity corresponds to 15 per cent of an all-India installed capacity of 686Mt/yr.

Image source:https://cementplantsupplier.com/cement-manufacturing/emerging-trends-in-cement-manufacturing-technology/

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