Economy & Market

“Green shoots seen in housing segment last fiscal”

Published

8 years ago

May 31, 2018

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Binod Kumar Modi,
Senior Analyst, Reliance Securities

How do you see the three segments of cement demand – residential, infrastructure and industrial construction – are set to boost/impact cement demand this year?
Residential: Green shoots in IHB (Independent House Building) segment were witnessed in the last fiscal. Further, revival in rural economy is also aiding demand growth. We believe residential, which forms a significant proportion of total cement consumption, is likely to remain the major demand driver in subsequent years. Further, government’s incentivised housing projects are likely to ensure sustained demand from residential segment.Infrastructure: The segment forms approximately 25-30 per cent of total cement consumption in India. We believe infrastructure share in total consumption is likely to move higher going forward. Growing urbanisation and huge infrastructure deficit in the country – which requires infrastructure development as to support sustained GDP growth – are likely to ensure higher cement consumption in this segment.Industrial construction: It forms around 5-8 per cent of total cement consumption. Likely revival in private capex is expected to drive higher consumption from this segment.Housing is by far the biggest contributor to cement demand. Do you see any major recovery on the sector during the reminder of the year with the government’s thrust to ‘Housing for All’ scheme?
As we mentioned earlier, there is a visible revival in rural economy as evidenced from robust volume growth by FMCG companies, two-wheelers and tractor volumes with back-to-back normal monsoon. Therefore, considering the fact that rural accounts for >50 per cent of total cement consumption in housing, we believe rural segment should continue to drive cement consumption. Further, post RERA’s initial disruption in urban real estate market, urban real estate markets too will witness traction hereon. Moreover, PMAY is expected to witness healthy momentum in FY19, which is expected to aid demand growth.Pre-poll year is considered to be an infrastructure year. What are the infrastructure areas that may get boost going by last Budget?
Pre election spending has been one of the key demand drivers historically in India. Considering three assembly elections in FY19 and general election in 2019, these are expected to ensure healthy consumption from infrastructure segment. We further expect traction in road construction to continue in FY19 considering 7,400 km (up 70 per cent YoY) projects awarded in FY18. Additionally, Bharatmala programme – which targets to build approximately 34,800 km by 2022 in Phase I, with an estimated investment of Rs 5.3 trillion – is likely to aid sustained demand growth for cement industry.What is the demand growth do you foresee for the year in the geographies of your operations and what are triggers?
We believe all regions should do well going forward as demand momentum has picked up in most of the pockets barring few. Resolution of sand issues in Uttar Pradesh and visible ease of sand availability in Tamil Nadu markets (these two states together consume 45-50 MT annually) are likely to support demand in FY19. We believe that Eastern region (registered double digit demand growth in FY18) continues to be attractive for cement consumption going forward as the region is still underdeveloped compared to other regions.How the consolidation underway in the industry, and expansions coming on stream, are set to impact capacity utilisation during the year?
Consolidation is imperative for Indian cement industry as it is still fragmented. With the ongoing consolidation happening by way of Binani, Century and Murali, no sizeable consolidation appears in sight as of now. However, considering the ongoing high cost scenario and muted realisation environment, it could be difficult for many small and mid-sized cement companies to operate in dismal profitability. Hence, industry consolidation will continue going forward. We foresee the industry to add new capacity of 40-45 MT in next three years as against incremental consumption of 65-70 MT during the same period, which clearly favours utilisation.Hope floats for cement industry. How do you see the growth prospects for the industry during the current year and in the next three years?
There has been a visible demand recovery in FY18 especially in the second half. Cement demand witnessed a growth of approximately 6-7 per cent in FY18 as against negative growth registered in the first half of the fiscal. A substantial recovery in rural demand especially from IHB segment along with sustained pickup in infrastructure development aided demand growth. We believe demand growth for current fiscal should remain healthy mainly to be supported by PMAY housing projects and continued thrust on infrastructure development. We foresee cement consumption to reach 350-360 MT in FY21 translating a CAGR of approximately 7.5 per cent through FY18-FY21E.What are the triggers/reasons for your views on the Industry’s growth prospects and how they are set to impact in your view?
Housing activities (approximately 60-65 per cent of total consumption) continue to remain the key drivers. The government is committed to accomplish its target of construction of 10 million houses under PMAY (Rural) in phase 1, which ends in FY19E. Latest data shows that government could achieve only 38 per cent of its target till FY18. We believe even if government manages to achieve 70 per cent of the balance target, there could be incremental cement consumption of approximately 20 MT in FY19. Further, traction in IHB segment, infrastructure development and pre-election spending are likely to drive cement demand.What are the changing dynamics of cost and profitability of the industry during the current year, from the present standpoint?
A persistent spike in petcoke and diesel prices remains a major headwind for the industry. Having surged by approximately 22-25 per cent in FY18, petcoke prices continued to move northwards till date in FY19. Industry’s power and fuel cost and freight cost together surged by approximately Rs 200-300 per tonne in last one year. We believe cement industry is unlikely to witness any meaningful reduction in fuel prices in FY19E. Hence, realisation improvement is the prime way to support profitability. Pricing scenario in FY18 was soft as all-India average realisation did not witness any improvement. However, there has been some improvement in realisation so far in this fiscal and we expect further price improvement post monsoon.

Concrete

Wonder Cement appoints Mahesh Singh as VP Corporate Brand Communication

Published

3 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

4 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

5 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.