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Multiple headwinds to slow down cement cos earnings

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The earnings projections of cement companies for FY18 are likely to suffer amid lower antic-ipated sales volumes and subdued prices. According to dealer estimates, the all-India average cement price fell by 2 per cent sequentially to Rs 326 per 50 kg bag in the December 2017 quarter. On a year-on-year basis, it rose marginally by 5 per cent. Historically, the sector has been reporting better traction in December. However, this time, realisation is under pressure due to several headwinds.

For instance, cost of sand, a key raw material, has increased by 4-5 times from the year ago due to lesser availability. In addition, construction activities in the real estate segment have slowed following demonetisation and implementation of Real Estate Regulatory Authority (RERA) Bill. The segment accounts for 60-65 per cent of total cement consumption. This has impacted offtake volume.

According to analysts, meeting the earlier expectation of 7-8 per cent volume growth for the full year will be a difficult task. To deliver that much growth, companies would require to clock 9 per cent growth in the second half of the fiscal.

Pet coke duty hike to hit operating margins
Cement companies operating profits may fall by one per cent following the Government’s decision to hike import duty on pet coke to 10 percent from the current 2.5 percent, a report said. ‘The operating margins of cement companies, which use high proportion of pet coke are likely to be affected following the government’s decision to increase the import duty on pet coke to 10 per cent from the present 2.5 per cent. The operating margins of cement manufacturers may fall by about 1 per cent, if increased cost is not passed on to end users,’ India Ratings said in its report.

The increase in import duty was announced after the Supreme Court decided to lift the ban on the use of pet coke. The Supreme Court allowed the cement industry to use pet coke as a feedstock, which had been banned last month to clean up the air pollution. While, issuing the exemption order for cement units, the apex court asked the government to frame guidelines for the use of pet coke.

Ind-Ra said that the cement manufacturers may resort to coal imports due to low domestic availability. Cement manufacturers prefer using pet coke, as it contains high calorific value (7,500-8, 500 Kcal/kg), to non-coking coal (2,200-7,000 Kcal/kg). The rise in the import duty on pet coke will result in a rise in power and fuel cost per metric tonne to Rs 5-7 per bag.

Total pet coke consumption in India increased by 34 per cent in October 2017 to 2 million metric tonne as compared with the level recorded for October 2015. Of the total pet coke consumed in the country during FY17-1HFY18, about 50 per cent was sourced domestically and the remaining through imports. According to Ind-Ra’s assessment, 35 per cent of the total pet coke imports were consumed by the cement industry.

Cement prices set to increase
Cement prices in India are expected to increase by Rs 3-4/bag by mid-January as the government has decided to hike the import duty on pet coke from the current 2.5 to 10 per cent. The rise in duty is expected to increase production costs by Rs 50-60/t and sector analysts predict the increase will be passed on to customers. ‘In case they are not passing it on, their EBITDA is likely to get affected and under the current scenario, no company will wish for it,’ an analyst with stockbroking firm Motilal Oswal Financial Services told. While the price of pet coke is currently 10-12 per cent higher than that of imported coal, its lower volume requirement means it is more cost-effective for cement producers to use.

Dalmia Bharat to acquire Murli Industries
Cement manufacturer Dalmia Bharat said its Rs 402 crore bid to acquire Murli Industries Ltd (MIL) has been approved by the Committee of Creditors (CoC) of the Nagpur-based company. The resolution plan submitted by Dalmia Cement (Bharat) Ltd, a subsidiary of Dalmia Bharat, to CoC of MMIL under the Insolvency and Bankruptcy Code, 2016 was approved recently.

‘Committee of creditors of MIL on December 20, 2017 approved the proposed resolution plan submitted by our subsidiary, DCBL for recommendation to NCLT Mumbai for its approval in relation to revival of MIL,’the company said.

It further added:
‘Following receipt of requisite approvals, the resolution plan provides for a payment of Rs 402 crore which is 1.7 times higher than the determined liquidation value.’

MIL has an integrated cement manufacturing plant with installed capacity of 3 MTPA in Chandrapur district of Maharashtra along with a captive thermal power plant of 50 MW. In addition, MIL also has paper and solvent extraction units in Maharashtra. MIL was referred to the corporate insolvency process by its lenders in April 2017. It had interests in cement, paper, solvent, power and pulp.

Coal shortage hits thermal power plants
Thermal power plants across India are facing a shortage of coal. If this situation does not improve over the next the few days, there is a real threat that power generated may stop. About 600 MW of coal-based power generation is already affected due to the coal shortage. The Western and Northern regions are the most affected, and in States such as Maharashtra and Rajasthan, about 40 per cent of power generated from coal is affected.

According to data of the Central Electricity Authority (CEA), most thermal power plants have just one to three days of reserve coal stock. Sources in Singareni Collieries say thermal plants to which it supplies coal are not facing any shortage of coal. These include plants in Telangana and Andhra Pradesh. According to CEA data, the number of thermal power plants in the country with critical stock (for only seven days) is four. The number of thermal power plants with super critical stock (for only four days) is 23.

CEA said that plants having low stocks due to outstanding dues, supply being more than committed quantity, and not lifting offered coal, are not listed in the critical and super critical data. In Andhra Pradesh, the Rayalaseema Thermal Power Station (RTPS) has coal stock for only four days, the Simhadri thermal power station has coal stock for two more days and Vizag thermal power plant has coal stock for three days. In Telangana, Ramagundam thermal power plant has coal stock for three days and Kakatiya and Kothagudem thermal power plants have coal stock for 10-21 days. There are nine plants in the northern region and 12 plants in the western region that are in critical and super critical stages.

The Union power ministry says that the issue of coal supply to power plants is being addressed in a coordinated manner by the three concerned ministries – power, coal and Railways. The Power Ministry said that this is being monitored at the highest level and that in spite of the the unprecedented rise in the demand for coal based power, due to better coordinated planning the demand of electricity in the grid is being met. More than 65 per cent of India’s electricity generation capacity comes from thermal power plants, with about 85 per cent of the country’s thermal power generation being coal-based.

The 10 biggest thermal power stations operating in India are all coal-fired.

SC allows use of pet coke in cement
The Supreme Court allowed the cement industry to use petroleum coke, a dirtier alternative to coal which had temporarily been banned as pollution levels shot up in Delhi last month. India is the world’s biggest consumer of petroleum coke, better known as pet coke, a dark solid carbon material that emits 11 per cent more greenhouse gas than coal, according to studies.

The Supreme Court in October banned the use of pet coke in and around New Delhi in a bid to clean the air in one of the world’s most polluted cities. But a blanket ban on the sale and use of petcoke could hit the country’s small and medium scale industries, which employ millions of workers and operate on thin margins, businesses say.

Supreme Court Judge Madan Bhimrao Lokur, in issuing the exemption order for cement and limestone industries, asked the government to frame guidelines for the use of pet coke. Shares of Indian cement companies, which use pet coke as feedstock, surged as much as 5 per cent on news of the court decision. Local producers of pet coke include Indian Oil Corp, Reliance Industries and Bharat Petroleum Corp.

Cement prices firm up in South
Prices of cement have jumped by an average Rs 25-30 per bag in the Southern States. The price is now hovering around Rs 310-320 per bag in Andhra Pradesh and Telangana. In Karnataka, its around Rs 340, while in Tamil Nadu and Kerala, it is being sold at over Rs 360. The prices were in the range of Rs 280 in Andhra Pradesh and Telangana. The present increase has not been normal, says M Prasad, a wholesale dealer of leading cement brands here. ‘Normally prices go up as the construction activity picks up during February to July for the year, which is seen as the best season for price realisation,’ he added.

Interestingly, the summer of 2017 proved different to the earlier three-four summers as prices unusually fell to around Rs 270 in Andhra Pradesh and Telangana. Typically, the prices are at peak with demand picking up and construction activity in full swing.

There has been no change in other factors such as production capacity and demand. Still the capacity utilisation and demand are under 40 per cent. The second quarter had seen a price erosion.

As per industry data, prices from August, September to October show that price erosion was in the range of Rs 5 in Andhra Pradesh and Telangana markets.

In Bengaluru, the prices remained more or less stable. Chennai also saw a drop of another Rs 5-10. In the days to come, the expected volume growth in the industry could be varied.

In Andhra Pradesh, the non-grounding of works related to the new capital Amaravati did not give the anticipated boost to the industry. The industry is hoping to gain from new capital probably a year and year-and-a-half from now in a slow fashion to be ramped up later. Even in Telangana, the real estate sector in the capital Hyderabad, is seeing ups and downs as far as new projects are concerned.

Cement, steel at the core of strongest infra show in a year
India’s infrastructure sector logged the highest growth in more than a year in November, while the country’s biggest carmakers reported double-digit sales growth in December, kicking off the new year on a positive note for the economy and pointing to a persistent revival trend. The index of eight core industries rose 6.8 per cent in November, the Government data showed, riding high on growth in cement and steel sectors. These have a weight of more than 40 per cent in the Index of Industrial Production (IIP), suggesting strong industrial growth in November after a dismal October.

‘Steel and cement growth at very high growth rates of 16.6 per cent and 17.3 per cent indicates restoration of the production in these sectors over pre-demonetisation levels which augurs well for real sector investment,’ said Economic Affairs Secretary, Subhash Chandra Garg.

Part of the rise is due to the favourable base effect stemming from the disruption in the wake of demonetisation in November 2016 that will prevail over the next few months.

The core sector grew 3.6 per cent in November 2016. The core sector growth in November 2017 was the best since 7.1 per cent in October 2016.

‘The early indicators for industrial production in the organised sectors in November 2017 provide favourable signals, such as the uptick in growth of the core sector and sharp improvement in the expansion of automobile production and non-oil merchandise exports,’ said Aditi Nayar, Principal Economist, ICRA.

India’s GDP growth recovered to 6.3 per cent in the July-September period from a three-year low of 5.7 per cent in the preceding quarter. Most experts had expected a stronger rebound as the impact of demonetisation and rollout of GST in July had faded.

CIL assures captive power producers of coal supply
State-owned miner Coal India (CIL) has assured coal availability to power industry body ICPPA, whose members include firms from steel and aluminium segment, as they are heavily dependent on the dry fuel. CIL Chairman and MD Gopal Singh along with other senior officials held a meeting with members of Indian Captive Power Producers Association (ICPPA). In India, captive power producers’ capacity stands at 40,000 Mega Watts (MW) and about 30,000 MW is produced by using coal, which is about 75 per cent. The rest is produced through alternate materials like gas-based and others, ICPPA General Secretary Rajiv Agarwal told.

‘The industry is highly dependent on coal and the government must understand this. There are many plants who are on the verge of shut down. Many may become a non-performing asset (NPA),’ he said. CIL, in the meeting, said about 71 per cent materialisation of coal was done during April-December 2017 for both IPPs (integrated power producers) and CPPs and assured there is no shortage of coal.

ICPPA said it is not satisfied by the words of the PSU, who it said is supposed to supply the dry fuel to industry. Agarwal said, ‘The given figure included dispatches by both rail and road. The share of CPPs rail dispatches is in the range of only 30 to 50 per cent and out of this 30 per cent major supply was given to those plants who were near the pits.’

Even if coal linkage auction is concerned, 41.5 MT was offered to the CPPs, he said and added, that out this the industry could not bid for 8.5 MT offered at ‘Magad-Amrapali of CCL (Central Coalfields Ltd)’ a place with evacuation constraint.

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Concrete

Adani’s Strategic Emergence in India’s Cement Landscape

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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.

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Concrete

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

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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.

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Concrete

Driving Measurable Gains

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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.

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