Economy & Market
Rocky road ahead
Published
9 years agoon
By
admin
The cement industry is likely to hit the pause button on the backdrop of recent developments like demonetisation, pending legislations like RERA & GST, and rising crude oil prices.
Housing and construction are the sectors most impacted by demonetisation. While market participants aver things will normalise in three-six months, the impact is enough to postpone the much-awaited recovery in cement demand by another year or so. Further, we fear a longer slump in secondary/unorganised real estate markets which drive a large proportion of cement sales (IHB). We also do not believe that a rebound in infrastructure demand will be enough to offset the above-mentioned slump in housing.
Given the impending slowdown in secondary/unorganised real estate markets, the vulnerability is higher for companies which derive bulk of their profitability from higher realisations (higher trade sales).
Cement sector valuations were pricing in a strong recovery pre-November 8, when demonetisation was announced (EV/EBITDA 12-17x 1yr Fwd). Despite recent correction, they still trade at 10-15x 1yr Fwd EV/EBITDA, once the impact of lower demand is factored in. We suspect some more downside as 3QFY17 will represent the confluence of negatives as both volumes and costs get hit.
We expect cement multiples to de-rate further. However, sector leaders (UltraTech/Shree Cement) should continue to command premium to historical averages and will be attractive when multiples approach historical averages (10x or so).
Till October, cement apparent demand had grown by ~5.1% year-on-year. Further, strong monsoons had lifted the possibility of a strong revival in demand, especially from some of the drought-hit regions in Maharashtra, Telangana and Karnataka. However, post demonetisation, things have taken a turn for the worse.
Our recent channel checks suggest sharp cuts in volumes across regions. The impact is more severe in regions with rural/IHB bias. We hear 25-50 per cent demand declines in north/central and Chhattisgarh. The more urbanised west/south are reporting ~15-30 per cent lower volumes. Parti?cipants maintain that December volumes will be worse hit compared to November. These numbers may be overstated, given extreme prevalent pessimism, but the downside is still significant. Earnings in past two-three quarters were driven by cheap pet coke. Things are likely to flip at the most inopportune time for cement firms, as spiking energy costs begin to sting at around the same time when volumes are likely to be low.
As a result 3QFY17 will be one of the worst quarters for cement companies in recent times. Upcoming elections in five states, including UP and Punjab, will likely further weigh on demand, given that the election code of conduct weighs on government spending. As a result, we remain cautious. Domestic demand growth has registered a double digit de-growth exactly once, in 4QFY01 (-10.4 per cent). This was an outcome driven by a number of factors: drought in four states, slowdown in real estate and the Gujarat earthquake.
With almost a month into the demonetisation exercise, we suspect cement demand could see a repeat of 4QFY01.
Source: HDFC Securities
Mangesh Bhadang, Analyst at brokerage Nirmal Bang, said, ‘We expect demand disruption to push down cement demand recovery by at least a year and hence capacity utilisation will be lower for a longer period than what was expected earlier.’The industry is expected to be impacted not only by the slowdown caused by the cash crunch, but also the impasse over the Goods and Services Tax (GST) Bill and the regulatory legislation for the Real Estate (Regulation and Development) Act or RERA. The impact, according to the analyst, is phenomenal: from an estimated growth rate of 6 per cent for the current fiscal made in September 2016, it now actually stands at a decline of 1.3 per cent. Fiscal 2018 is likely to see a growth rate of 6.7 per cent, making the years of high growth a thing of the past.
‘We also believe that the golden period of demand growth witnessed between FY06 to FY10 is unlikely to be repeated in the near future,’ Bhadang wrote in his note.
Impact of rising crude oil prices
As if the domestic headwinds were not enough, the industry has also to contend with the end of low input costs, giving the trend of rising crude oil prices globally. ‘Cement companies’ earnings were aided by softening of input prices over the past two years, predominantly coal/pet coke and freight rates through lower diesel prices. We believe that this period of decline in input costs is largely over, as prices of various input products like international coal, pet coke and diesel are on the rise. With demand expected to be low, we believe that cost inflation will test pricing power in the industry,’ Bhadang said.
Cement manufacturing companies in India include Ambuja Cement, ACC, UltraTech, JK Cement, Prism Cement and Shree Cements. India is the second-largest producer of cement in the world, after China.
Capacity utilisation to remain stagnant: ICRA
In the first seven months of FY17, demand growth in the cement sector was already modest at 4.8 per cent. After the note ban, the sector is likely to be affected negatively by disruption to the real estate sector, says the rating agency.
The cement sector is one of the worst hit by demonetisation. Despite limited capacity addition, capacity utilisation of the cement industry is likely to remain stagnant in fiscal year 2017 as demand growth is expected to be weak, rating agency ICRA said in a report. In the first seven months of FY17, demand growth in the cement sector was already modest at 4.8 per cent and after the note ban, is likely to be affected negatively by disruption to the real estate sector.
The cement sector is one of the worst hit by demonetisation; volumes have been dented severely and a pick-up in consumption may not happen anytime soon. Hence, the outlook for the second half of FY17 is unlikely to be as bright as anticipated earlier by many analysts.
Uncharted Territory
Uncertainty remains on demand, pricing and margins, says Vivek Maheshwari, Investment Analyst.
The Indian cement sector is on a shaky foundation and there are multiple uncertainties as we start the seasonally strong period (Jan-May) of 2017.
Demonetisation has impacted demand, although flattish production volume (year-on-year) in November 2016 is a positive. The industry is hopeful of a recovery through 2017, though monthly trends could be quite volatile. Demonetisation has, however, impacted prices, which are down 1-5 per cent month-on-month in December 16, as per our channel checks. The timing of demonetisation is quite inappropriate for the industry, as energy costs (pet coke, coal and diesel) have been steadily trending up. We expect heightened volatility in margins ahead, as several variables are at play and we are negative on all the stocks except UltraTech which is our only relative pick.
Concerns on demand
Cement volumes across regions have been impacted, particularly in December 16. While liquidity issues will ease gradually, the channel is still concerned on demand due to factors like impact on end-user industry and supply-chain issues in case of ancillary industries (sand, aggre?gates, etc.) and hence, demand trend may be weak. The government’s thrust on social housing and infrastructure should support cement demand but we are unsure if this could fully offset the impact.
Pricing pressures
Demand pressures may deter the cement industry from increasing prices significantly, which is typically expected during 1H-2017 due to seasonality. While the industry has shown strong discipline in the past few quarters, a potentially weak demand trend may change dynamics and result in pricing pressures. Prices have actually declined by 1-5 per cent across regions, though the industry would attempt to reverse these in the coming months.
High volatility in margins ahead
For example, pet coke prices are up 140 per cent from the bottom, while imported coal prices are up 79 per cent and rupee depreciation further exacerbates the impact; diesel prices are also up 31 per cent from the recent lows. This would impact sector margins in the near term and would also delay the margin recovery by a few quarters.
Negative view stays
This has taken multiples to above-historical averages, also partially on expectations of a strong recovery in margins, which we believe are at risk in the current context, as volumes are weak, pricing power is impaired, and costs are rising.
A majority of cement demand (55-65 per cent) comes from the housing sector. It is important to see how the sector is going to fare in 2017. The end of 2017 is most likely to see the initiation of a robust and sustainable growth trajectory for India’s real estate industry and will be recognised as the base for the future growth of this sector, says Shishir Baijal, Chairman and Managing Director, Knight Frank (India) Pvt. Ltd.
In the first week of November 2016 the overall positive sentiment was attributed to a host of factors including the political stability, regulatory environment, enhanced infrastructure, strong investments, approval to the GST bill, and amendments to REITs.
Just when the industry was was gearing up to meet the deadlines set by the government for Real Estate (Real Estate Regulation & Development Act Act 2016 (RERA) and Goods and Services Tax (GST),) it received a jolt in the form of demonetisation of the INR 500 and 1000 currency notes with immediate effect.
Another imminent change that will impact the sector in the days to come is the partial implementation of RERA. RERA, once implemented, will increase transparency, which in turn will bring back buyer confidence. Developers, on the other hand, will have to adjust to the new environment and more specifically, they have to change their business model whilst adhering to stricter compliance norms.
The impact of demonetisation is a transient one and the economy will undergo structural changes for the first three quarters of 2017. The industry awaits the implementation of policy reforms like RERA & GST, medium term impact of demonetisation and listing of REIT. During this phase, enterprises are expected to streamline their business processes and implement international best practices to adhere to the upcoming changed business environment. There will be a greater influence of FDI (Foreign Direct Investment) that will help create jobs and revitalise growth within the sector. Overall, institutional participation-both domestic and global markets-will help the sector in getting high quantum of funds at competitive rates. In view of the various procedural changes adopted by the government, it is also expected to be an important facilitator in bringing back stability within the real estate sector.
The end of 2017 is most likely to see the initiation of a robust and sustainable growth trajectory for India’s real estate industry and will be recognised as the base for the future growth of this sector.
Concrete
Adani’s Strategic Emergence in India’s Cement Landscape
Published
2 weeks agoon
September 16, 2025By
admin
Milind Khangan, Marketing Head, Vertex Market Research, sheds light on Adani’s rapid cement consolidation under its ‘One Business, One Company’ strategy while positioning it to rival UltraTech, and thus, shaping a potential duopoly in India’s booming cement market.
India is the second-largest cement-producing country in the world, following China. This expansion is being driven by tremendous public investment in the housing and infrastructure sectors. The industry is accelerating, with a boost from schemes such as PM Gati Shakti, Bharatmala, and the Vande Bharat corridors. An upsurge in affordable housing under the Pradhan Mantri Awas Yojana (PMAY) further supports this expansion. In May 2025, local cement production increased about 9 per cent from last year to about 40 million metric tonnes for the month. The combined cement capacity in India was recorded at 670 million metric tonnes in the 2025 fiscal year, according to the Cement Manufacturers’ Association (CMA). For the financial year 2026, this is set to grow by another 9 per cent.
In spite of the growing demand, the Indian cement industry is highly competitive. UltraTech Cement (Aditya Birla Group) is still the market leader with domestic installed capacity of more than 186 MTPA as on 2025. It is targeted to achieve 200 MTPA. Adani Cement recently became a major player and is now India’s second-largest cement company. It did this through aggressive consolidation, operational synergies, and scale efficiencies. Indian players in the cement industry are increasingly valuing operational efficiency and sustainability. Some of the strategies with high impact are alternative fuels and materials (AFR) adoption, green cement expansion, and digital technology investments to offset changing regulatory pressure and increasing energy prices.
Building Adani Cement brand
Vertex Market Research explains that the Adani Group is executing a comprehensive reorganisation and consolidation of its cement business under the ‘One Business, One Company’ strategy. The plan is to integrate its diversified holdings into one consolidated corporate entity named Adani Cement. The focus is on operating integration, governance streamlining, and cost reduction in its expanding cement business.
Integration roadmap and key milestones:
- September 2022: The consolidation process started with the $6.4 billion buyout of Holcim’s majority stakes in Ambuja Cements and ACC, with Ambuja becoming the focal point of the consolidation.
- December 2023: Bought Sanghi Industries to strengthen the firm’s presence in western India.
- August 2024: Added Penna Cement to the portfolio, improving penetration of the southern market of India.
- April 2025: Further holding addition in Orient Cement to 46.66 per cent by purchasing the same from CK Birla Group, becoming the promoter with control.
- Ambuja Cements amalgamated with Adani Cement: This was sanctioned by the NCLT on 18th July 2025 with effect from April 1, 2024. This amalgamation brings in limestone reserves and fresh assets into Ambuja.
- Subject to Sanghi and Penna merger with Ambuja: Board approvals in December 2024 with the aim to finish between September to December 2025.
- Ambuja-ACC future integration: The latter is being contemplated as the final step towards consolidation.
- Orient Cement: It would serve as a principal manufacturing facility following the merger.
Scale, capacity expansion and market position
In financial year-2025, Adani Cement, including Ambuja, surpassed 100 MTPA. This makes it one of the world’s top ten cement companies. Along with ACC’s operations, it is now firmly placed as India’s second-largest cement company. In FY25, the Adani group’s sales volume per annum clocked 65 million metric tonnes. Adani Group claims that it now supplies close to 30 per cent of the cement consumed in India’s homes and infrastructure as of June 2025.
The organisation is pursuing aggressive brownfield expansion:
- By FY 2026: Reach 118 MTPA
- By FY 2028: Target 140 MTPA
These goals will be driven by commissioning new clinker and grinding units at key sites, with civil and mechanical works underway.
As of 2024, Adani Cement had its market share pegged at around 14 to 15 per cent, with an ambition to scale this up to 20 per cent by FY?2028, emerging as a potent competitor to UltraTech’s 192?MTPA capacity (186 domestic and overseas).
Strategic advantages and competitive benefits
The consolidation simplifies decision-making by reducing legal entities, centralising oversight, and removing redundant functions. This drives compliance efficiency and transparent reporting. Using procurement power for raw materials and energy lowers costs per ton. Integrated logistics with Adani Ports and freight infrastructure has resulted in an estimated 6 per cent savings in logistics. The group aims for additional savings of INR 500 to 550 per tonne by FY 2028 by integrating green energy, using alternative fuel resources, and improving sourcing methods.
Market coverage and brand consistency
Brand integration under one strategy will provide uniform product quality and easier distribution networks. Integration with Orient Cement’s dealer base, 60 per cent of which already distributes Ambuja/ACC products, enhances outreach and responsiveness.
By having captive limestone reserves at Lakhpat (approximately 275 million tonnes) and proposed new manufacturing facilities in Raigad, Maharashtra, Adani Cement derives cost advantage, raw material security, and long-term operational robustness.
Strategic implications and risks
Consolidation at Adani Cement makes it not just a capacity leader but also an operationally agile competitor with the ability to reap digital and sustainability benefits. Its vertically integrated platform enables cost leadership, market responsiveness, and scalability.
Challenges potentially include:
- Integration challenges across systems, corporate cultures, and plant operations
- Regulatory sanctions for pending mergers and new capacity additions
- Environmental clearances in environmentally sensitive areas and debt management with input price volatility
When materialised, this revolution would create a formidable Adani–UltraTech duopoly, redefining Indian cement on the basis of scale, innovation, and sustainability. India’s leading four cement players such as Adani (ACC and Ambuja), Dalmia Cement, Shree Cement, and UltraTech are expected to dominate the cement market.
Conclusion
Adani’s aggressive consolidation under the ‘One Business, One Company’ strategy signals a decisive shift in the Indian cement industry, positioning the group as a formidable challenger to UltraTech and setting the stage for a potential duopoly that could dominate the sector for years to come. By unifying operations, leveraging economies of scale, and securing vertical integration—from raw material reserves to distribution networks—Adani Cement is building both capacity and resilience, with clear advantages in cost efficiency, market reach, and sustainability. While integration complexities, regulatory hurdles, and environmental approvals remain key challenges, the scale and strategic alignment of this consolidation promise to redefine competition, pricing dynamics, and operational benchmarks in one of the world’s fastest-growing cement markets.
About the author:
Milind Khangan is the Marketing Head at Vertex Market Research and comes with over five years of experience in market research, lead generation and team management.
Concrete
Precision in Motion: A Deep Dive into PowerBuild’s Core Gear Series
Published
1 month agoon
August 16, 2025By
admin
PowerBuild’s flagship Series M, C, F, and K geared motors deliver robust, efficient, and versatile power transmission solutions for industries worldwide.
Products – M, C, F, K: At the heart of every high-performance industrial system lies the need for robust, reliable, and efficient power transmission. PowerBuild answers this need with its flagship geared motor series: M, C, F, and K. Each series is meticulously engineered to serve specific operational demands while maintaining the universal promise of durability, efficiency, and performance.
Series M – Helical Inline Geared Motors: Compact and powerful, the Series M delivers exceptional drive solutions for a broad range of applications. With power handling up to 160kW and torque capacity reaching 20,000 Nm, it is the trusted solution for industries requiring quiet operation, high efficiency, and space-saving design. Series M is available with multiple mounting and motor options, making it a versatile choice for manufacturers and OEMs globally.
Series C – Right Angled Heli-Worm Geared Motors: Combining the benefits of helical and worm gearing, the Series C is designed for right-angled power transmission. With gear ratios of up to 16,000:1 and torque capacities of up to 10,000 Nm, this series is optimal for applications demanding precision in compact spaces. Industries looking for a smooth, low-noise operation with maximum torque efficiency rely on Series C for dependable performance.
Series F – Parallel Shaft Mounted Geared Motors: Built for endurance in the most demanding environments, Series F is widely adopted in steel plants, hoists, cranes, and heavy-duty conveyors. Offering torque up to 10,000 Nm and high gear ratios up to 20,000:1, this product features an integral torque arm and diverse output configurations to meet industry-specific challenges head-on.
Series K – Right Angle Helical Bevel Geared Motors: For industries seeking high efficiency and torque-heavy performance, Series K is the answer. This right-angled geared motor series delivers torque up to 50,000 Nm, making it a preferred choice in core infrastructure sectors such as cement, power, mining, and material handling. Its flexibility in mounting and broad motor options offer engineers’ freedom in design and reliability in execution.
Together, these four series reflect PowerBuild’s commitment to excellence in mechanical power transmission. From compact inline designs to robust right-angle drives, each geared motor is a result of decades of engineering innovation, customer-focused design, and field-tested reliability. Whether the requirement is speed control, torque multiplication, or space efficiency, Radicon’s Series M, C, F, and K stand as trusted powerhouses for global industries.

Klüber Lubrication India’s Klübersynth GEM 4-320 N upgrades synthetic gear oil for energy efficiency.
Klüber Lubrication India has introduced a strategic upgrade for the tyre manufacturing industry by retrofitting its high-performance synthetic gear oil, Klübersynth GEM 4-320 N, into Barrel Cold Feed Extruder gearboxes. This smart substitution, requiring no hardware changes, delivered energy savings of 4-6 per cent, as validated by an internationally recognised energy audit firm under IPMVP – Option B protocols, aligned with
ISO 50015 standards.
Beyond energy efficiency, the retrofit significantly improved operational parameters:
- Lower thermal stress on equipment
- Extended lubricant drain intervals
- Reduction in CO2 emissions and operational costs
These benefits position Klübersynth GEM 4-320 N as a powerful enabler of sustainability goals in line with India’s Business Responsibility and Sustainability Reporting (BRSR) guidelines and global Net Zero commitments.
Verified sustainability, zero compromise
This retrofit case illustrates that meaningful environmental impact doesn’t always require capital-intensive overhauls. Klübersynth GEM 4-320 N demonstrated high performance in demanding operating environments, offering:
- Enhanced component protection
- Extended oil life under high loads
- Stable performance across fluctuating temperatures
By enabling quick wins in efficiency and sustainability without disrupting operations, Klüber reinforces its role as a trusted partner in India’s evolving industrial landscape.
Klüber wins EcoVadis Gold again
Further affirming its global leadership in responsible business practices, Klüber Lubrication has been awarded the EcoVadis Gold certification for the fourth consecutive year in 2025. This recognition places it in the top three per cent
of over 150,000 companies worldwide evaluated for environmental, ethical and sustainable procurement practices.
Klüber’s ongoing investments in R&D and product innovation reflect its commitment to providing data-backed, application-specific lubrication solutions that exceed industry expectations and support long-term sustainability goals.
A trusted industrial ally
Backed by 90+ years of tribology expertise and a global support network, Klüber Lubrication is helping customers transition toward a greener tomorrow. With Klübersynth GEM 4-320 N, tyre manufacturers can take measurable, low-risk steps to boost energy efficiency and regulatory alignment—proving that even the smallest change can spark a significant transformation.

Cement Margins Seen Rising 12–18 per cent in FY26

Adani’s Strategic Emergence in India’s Cement Landscape

Precision in Motion: A Deep Dive into PowerBuild’s Core Gear Series

Driving Measurable Gains

Reshaping the Competitive Landscape

Cement Margins Seen Rising 12–18 per cent in FY26

Adani’s Strategic Emergence in India’s Cement Landscape

Precision in Motion: A Deep Dive into PowerBuild’s Core Gear Series

Driving Measurable Gains
