Economy & Market

Stable Show

Published

9 years ago

May 31, 2017

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Historically, the drivers of cement volumes have been infrastructure, construction and real estate activities. Cement volume growth shows a varying correlation with each of these segments.

India Ratings and Research (Ind-Ra) has maintained a "stable" outlook on Indian cement manufacturers for FY18. Ind-Ra expects the operating profitability of cement manufacturers in FY18 to be around the FY16 and estimated FY17 levels, due to stable demand growth, despite an increase in input cost. Demand will be backed by an increase in government expenditure. Ind-Ra also expects the credit profile of cement manufacturers to remain stable on stable operating profitability and in the absence of debt-led capex.

Stable Demand Growth
Ind-Ra has revised down its FY17 growth estimates to 3 per cent-3.5 per cent from 4 per cent-6 per cent, earlier. This revision is largely attributed to a blip in demand due to demonetisation. The rating agency, however, expects the cement industry to grow 4 per cent-5 per cent year-on-year (y-o-y) in FY18, driven largely by the demand stemming from infrastructure activities and a revival in housing demand in rural areas, both led by government spending.

Rising Cost Curve
The price of pet coke and coal has almost doubled since September 2016. The current increase in crude oil prices is also likely to lead to an increase in diesel prices. Ind-Ra expects stable cement demand to enable cement manufacturers to pass on increases in cost during FY18.

Budgetary Support
The rating agency believes that a 38 per cent and 23 per cent increase in the allocation of funds towards the housing sector under the Pradhan Mantri Awas Yojana and spending of the ministry of road transport and highways to Rs 290 billion and Rs 649 billion, respectively, would increase cement demand in FY18.

Limited Capacity Utilisation
According to Ind-Ra’s expectation, from FY16-18, there will be an additional capacity of around 50 mtpa capacity at a CAGR of 6 per cent, compared to the CAGR of 4.9 per cent during FY13-FY16 (additional 40 mtpa). The country’s eastern region will continue to lead supply growth and is likely to add 17 mtpa through FY16-18, followed by the north (14 mtpa). The CAGR capacity additions in the eastern (10 per cent) and northern regions (7 per cent) may outpace cement demand in these regions.

Pan-India capacity utilisation remained stable in FY16 at around 70 per cent. However, the rating agency has revised pan-India capacity utilisation for FY17 to 65 per cent from 69 per cent-70 per cent, due to the weak demand outlook in 2HFY17 on account of demonetisation. Importantly, the rating agency does not expect capacity utilisation to improve significantly in FY18 and expects it to remain around 70 per cent.

Credit Profile
The credit profile of cement manufacturers is likely to remain stable in FY17. The negative impact of a possible decline in operating profitability during 2HFY17 due to an increase in fuel cost and lower volumes will be compensated by the higher operating profitability reported by the companies during 1HFY17 due to lower fuel prices and higher demand. Median EBITDA margins for a sample of 17 cement companies improved to 15.37 per cent in 1HFY17 (FY16: 14.38 per cent, FY15: 15.07 per cent).

Positive Impact of GST
The current excise duty is 12.5 per cent and VAT is 12 per cent-15 per cent. Thus, the total tax paid or payable on cement by end-customers can range anywhere between 24.5 per cent-27.5 per cent. At a GST rate of 18 per cent, even if cement companies pass on 50 per cent of their savings by lowering cement prices, the agency believes that their margins would increase by 300-500 basis points. However, a change in cement prices would not be large enough to affect product demand.

Slow Demand Pick-up
Cement demand grew 2.8 per cent y-o-y during April-December 2016 (April-December 2015: 2.64 per cent, FY16: 4.8 per cent). It tanked 8.7 per cent y-o-y in December 2016; however, it increased 7.2 per cent month-on-month in December 2016. The rating agency expects the demand would be sluggish for the remaining part of FY17 due to demonetisation.

In the current fiscal year, urban housing demand has been affected by continued affordability issues and weak consumer sentiments. Urban housing in Tier-1 cities may improve with a reduction in interest rates. Rural demand was expected to improve during FY17; however, demonetisation has impacted the demand due to a cash crunch. Historically, the drivers of cement volume have been infrastructure, construction and real estate activities. Cement volume growth shows a varying correlation with each of these segments.

Bank credit growth has been used as an indicator of activities in these three segments. The moderately high correlation of close to 0.6 between cement volume growth and bank credit growth for the construction and commercial real estate sectors indicates that activities in these sectors are possibly the key drivers of cement volume growth. Ind-Ra expects construction gross value addition growth to improve to 4.1 per cent in FY18 from a likely 2.9 per cent in FY17 (FY16: 3.9 per cent). Historically, cement growth has been in line with the growth in construction gross value addition.

Concrete

Wonder Cement appoints Mahesh Singh as VP Corporate Brand Communication

Published

2 days ago

October 9, 2026

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Singh brings 20+ years of brand and marketing experience, and will lead integrated corporate brand communication initiatives at Wonder Cement

New Delhi

Wonder Cement, a leading cement manufacturer, has appointed Mahesh Singh as Vice President – Corporate Brand Communication. In his new role, he will oversee corporate brand strategy and communication, including digital and performance marketing, public relations, trade, events, exhibitions, sports and experiential marketing.

Singh brings over two decades of experience across marketing and communications, with roles spanning the automotive industry, agencies and entrepreneurship. He spent more than a decade with Honda Motorcycle & Scooter India, working across integrated communication, media, digital, retail and consumer engagement. His stint also included helping build the company’s digital marketing capabilities.

He moved to dentsu X India as Vice President – Strategy & Planning, working across categories such as automotive, auto components, electric vehicles, FMCG, consumer electronics, BFSI, apparel and brand consulting. His responsibilities included media and marketing strategy, product launches, content, performance marketing and consumer activations.

Singh subsequently took an entrepreneurial route with Radiant Brands before joining Shriram Ltd (SPR Autotech) as Head – Marketing & Communications. There, his remit included brand and corporate strategy, communications, PR and ORM, retail identity, loyalty programmes and events.

At Wonder Cement, Singh will be responsible for bringing together the company’s corporate brand communication initiatives across digital, performance marketing, PR, trade, sports and experiential platforms. The role will focus on creating an integrated approach to communication across consumers, trade partners and other key stakeholders.

The appointment brings to Wonder Cement a marketer whose career has spanned the brand, agency and entrepreneurial sides of the communications ecosystem.

Wonder Cement, part of the RK Group, is a cement manufacturer with roots in Rajasthan and a focus on quality, trust and transparency. The company has grown to six manufacturing plants, and a cement capacity of 21.5 MTPA. With more than 2,000 employees and a network of over 5,000 dealers, its operations span manufacturing, distribution and customer engagement, with a focus on consistent product quality and efficient execution.

Concrete

JSW Cement commissions additional 1 MTPA grinding unit at Nagaur

Published

3 days ago

October 8, 2026

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With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA,
Mumbai

JSW Cement, one of India’s leading green cement producers and part of the diversified JSW Group, today announced the successful commissioning of an additional 1.00 MTPA cement grinding unit at Nagaur, Rajasthan. The commissioning marks another significant milestone in the Company’s growth strategy.

With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA, while its total clinker manufacturing capacity, including clinker capacity at its joint venture, JSW Cement FZC, stands at 9.74 MTPA.

JSW Cement had commenced operations in North India in March 2026 with the Nagaur Integrated Plant, comprising a 3.30 MTPA clinkerisation unit and 2.50 MTPA cement grinding unit. With the commissioning of the additional 1.00 MTPA cement grinding unit, the plant’s total cement grinding capacity has increased to 3.50 MTPA, enhancing the company’s ability to cater to the growing cement demand across Rajasthan, Haryana, Punjab and the National Capital Region (NCR). The expansion has been funded through a strategic mix of equity and long-term debt.

During the quarter ended 30th September 2026, JSW Cement has also commissioned the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) at the Nagaur Integrated Plant.

Nilesh Narwekar, CEO, JSW Cement, said: “The commissioning of additional 1.00 MTPA grinding capacity at Nagaur is a key strategic priority for us and will accelerate JSW Cement’s expansion into North India. We look forward to servicing the growing needs of the region and contributing to the economic growth of Rajasthan, Haryana, Punjab and the NCR area. I am delighted to share that the company has commissioned this grinding unit within the expected timeline, showcasing our project execution capabilities. Further, the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) are expected to substantially reduce our production costs going forward.”

Concrete

UltraTech becomes first Indian cement firm to cross 2 GW green energy

Published

4 days ago

October 7, 2026

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UltraTech Cement has crossed 2 GW of captive green energy capacity, with renewables and waste heat recovery meeting 48 per cent of its power needs.

Mumbai

UltraTech Cement Limited has surpassed 2 GW of installed green energy capacity for captive use, becoming the first cement company in India to achieve the milestone. The Aditya Birla Group company commissioned 116.55 MW of wind capacity at its Inter-State Transmission System-connected wind-solar hybrid project in Barmer, Rajasthan, along with 10 MW of Waste Heat Recovery System capacity at Sarlanagar Cement Works in Karnataka.

With these additions, UltraTech’s cumulative installed green energy capacity has reached 2,024 MW. This includes 1,580 MW of renewable energy capacity and 444 MW of waste heat recovery capacity, together meeting around 48 per cent of the company’s current power requirements.

The company said the milestone reflects the progress of its long-term energy transition strategy. In FY27 so far, nearly one-third of UltraTech’s 76 manufacturing units in India have maintained green energy utilisation above 50 per cent of their electricity requirements, while five units have crossed 95 per cent.

K C Jhanwar, Managing Director, UltraTech Cement Limited, said, “Crossing the 2 GW green energy milestone is the result of a strategy we have pursued consistently over the past decade. Cement is an energy-intensive, hard-to-abate sector, and showing that reliability and growth can go hand in hand with a rapid shift to green energy sets a benchmark for the industry. With nearly half of our power needs now met through green energy, we are significantly less exposed to fossil fuel supply constraints and power price volatility. As we scale up renewables, waste heat recovery and battery storage across our operations, we are building an energy foundation for stable, long-term growth.”

UltraTech commissioned 430 MW of green energy capacity in FY26 and continues to expand its renewable energy and waste heat recovery portfolio.

The company is also progressively integrating Battery Energy Storage Systems across its operations to improve renewable energy utilisation and supply reliability.

In 2025, UltraTech operationalised what it described as India’s first on-site hybrid round-the-clock renewable energy project at Sewagram Cement Works in Gujarat. The project combines solar, wind and battery storage.

As part of its decarbonisation strategy, UltraTech said it has not invested in new captive thermal power capacity for either greenfield projects or brownfield expansions at its integrated units for more than a decade.

The company said its expanding green energy portfolio is helping reduce dependence on conventional grid electricity and fossil fuel-based power, while lowering exposure to fluctuations in coal and electricity prices.

UltraTech aims to increase green energy’s share in its total power mix to 85 per cent by 2030. As a member of RE100, it has also committed to meeting 100 per cent of its electricity requirement through renewable sources by 2050.

UltraTech Cement, the cement flagship of the Aditya Birla Group, has a total grey cement capacity of 210.1 MTPA and white cement and putty capacity of 3.5 MTPA. The company is also a signatory to the GCCA Climate Ambition 2050 and has committed to the GCCA Net Zero Concrete roadmap.