Economy & Market

Industries Shrugging Off Demonetisation Pangs: CARE

Published

8 years ago

August 31, 2018

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The performance of 3,292 companies in Q1 FY19 over the last year (Q1 FY18) reveals an improvement, with net sales registering a double-digit growth during the quarter over Q1 FY18 performance. Also, after declining by 10.8 per cent y-o-y in Q1 FY18, net profits witnessed a double-digit growth of about 12.9 per cent year-on-year (y-o-y) in Q1 FY19. Net profit margin witnessed marginal contraction of about 30 basis points y-o-y during the quarter, says CARE Ratings in a recent report.

In Q1 FY19, after excluding the banks and finance companies which are guided by exogenous factors, the performance of industry (2,749 companies) depicts almost similar trend as that of the aggregate sample in terms of sales. However, in terms of profits, the aggregate performance of companies witnessed a sharp improvement and increased by 38 per cent y-o-y vis-a-vis a decline of 13.6 per cent registered in Q1 FY18, says the report, Corporate Performance for Q1-FY19, anchored by Madan Sabnavis, Chief Economist, CARE Ratings.

For the aggregate sample, net profit margin remained positive. While excluding banks and finance companies, the net profit margins improved by about 130 basis points in Q1 FY19. It has also been observed that some industries in the Indian economy have been picking momentum leaving behind the demonetisation and GST implementation impact that did impact industry performance between Q3 FY17 and Q2 FY18.

Small firms facing net loss
While the overall aggregate picture of the industry has improved post-GST (Goods and Services Tax) implementation, the smaller companies, i.e., companies below Rs 100 crore sales continue to be on the back foot. This size range with maximum number of companies has continued to register net loss in Q1 FY19. Also, of the total 1,857 companies with net sales below Rs 100 crore, 813 companies (about 45 per cent companies) have posted a y-o-y decline in net sales during Q1 FY19.

Of the 50 industries considered, majority of industries have witnessed positive growth in sales during Q1 FY19 except for nine industries. Out of these, with positive sales growth, 20 industries registered y-o-y higher growth vis-a-vis Q1 FY18. Some of the leading industries were auto – tractors, auto – trucks/LCVs, auto ancillary, metals – steel and iron products, aluminium and ferrous, private banks, housing finance, finance – NBFCs, refinery and oil exploration, fertilizers, industrial gases and fuels, etc.

In all, nine industries witnessed negative y-o-y growth in net sales of Q1 FY19 with significant declines. However, some industries such as glass, paints, textiles, plastics, ceramics, etc. are highly unorganised and therefore the performance will not necessarily be reflected in the analysis mentioned below. In order to gauge the performance of various industries, we have considered the index of industrial production (IIP) growth in Q1 FY19 for the comparable industries, CARE Ratings said. The following are the CARE Ratings’ comments on cement and related industries in the report:

Cement
Industry net sales witnessed a subdued growth during the Q1 FY19. However, as per the IIP, cement production increased by over 14 per cent during Q1 FY19. This growth in IIP could majorly be on account of inventory restocking by players. Rural markets have shown some traction in cement demand.
Central and Western market realisations have improved, eastern markets remained steady. Northern and Southern market continues to be volatile.
Going forward, increase in demand from retail housing (PMAY) and infrastructure is expected to improve realisation for the industry.

Steel & iron
The industry’s performance registered growth which was however lower than Q1 FY18 on sales front on a y-o-y basis backed. The growth in revenues was backed by strong underlying demand and rising international prices, domestic steel prices too went up during the quarter.
Manufacture of basic metals under IIP witnessed a growth of about 3.8 per cent during Q1 FY19.
The prices of HR coils, CR coils and TMT bars grew by 27-40 per cent on a y-o-y basis
Affordable housing is expected to provide big boost to the TMT steel sector. Also, there is a lot of consolidation taking place in the industry, which will benefit the players going forward.

Construction
Industry has witnessed only a marginal growth of 1.7 per cent in Q1 FY19 over a growth of 7.9 per cent in Q1 FY18 due to subdued construction activities in organised real estate during the quarter

Paints
Sales increased only marginally during the quarter on back of slower recovery in demand vis-a-vis last year season.
The quarter witnessed upward movement in crude along with lot of volatility in forex and depreciation in the rupee resulting in high inflation.
However, profits have registered a double-digit growth of about 24 per cent in Q1 FY19 vis-a-vis a decline of about 16 per cent in Q1 FY18.

Ceramics/marble/granite/sanitary ware
The industry witnessed slower off-take from user industry along with issues related to GST implementation (tax rate on tiles under GST increased to 28 per cent vis-a-vis 12-14.5 per cent rates earlier, this rate was revised to 18 per cent later)

The industry continues to anticipate a rise in demand for tiles, backed by the rising rural incomes. Lifestyle decisions in the rural segment is likely to have a positive affect the demand for floor tiles and sanitary ware. The only concern is the declining margins, which comes as a result of frequent revisions in GST rates on Ceramic products.

Some interesting takeaways
Growth in sales for the sample companies excluding banks and finance though marginally lower than that in FY18 comes as a surprise considering that Q1-FY18 was a period when GDP growth slowed down sharply. On a low growth base one would have expected growth to have been higher.
There was a sharp increase in growth in net profit. However, this came over a negative growth rate in FY18. When compared with Q1-FY17, growth is less sharp.
The same picture emerges for net profit margin, where the increase in Q1-FY19 over FY18 from 5.8 per cent to 7.1 per cent is still lower than 7.7 per cent in FY17.
The interest cover improved during this quarter which can be broadly attributed to higher profits growth.
Size wise analysis reveals that the larger companies with sales of over Rs 500 crore dominated the overall performance. However, the smaller ones with sales of less than Rs 100 crore each did not do well in terms of sales and profit.
Industry wise performance was quite diverse with no fixed pattern being discernible.

Y-o-Y decline in net sales in Q1 FY19
Sugar
Consumer durables – electronics
Electronics – components
Telecom equipment
Cement
Ceramics/marble/granite/sanitary -ware
Telecommunications – service providers
Mining and minerals
Diamond and jewellery

Economy & Market

TSR Will Define Which Cement Companies Win India’s Net-Zero Race

Published

4 days ago

April 27, 2026

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Jignesh Kundaria, Director and CEO, Fornnax Technology

India is simultaneously grappling with two crises: a mounting waste emergency and an urgent need to decarbonise its most carbon-intensive industries. The cement sector, the second-largest in the world and the backbone of the nation’s infrastructure ambitions, sits at the centre of both. It consumes enormous quantities of fossil fuel, and it has the technical capacity to consume something else entirely: the waste our cities cannot get rid of.

According to CPCB and NITI Aayog projections, India generates approximately 62.4 million tonnes of municipal solid waste annually, with that figure expected to reach 165 million tonnes by 2030. Much of this waste is energy-rich and non-recyclable. At the same time, cement kilns operate at material temperatures of approximately 1,450 degrees Celsius, with gas temperatures reaching 2,000 degrees. This high-temperature environment is ideal for co-processing, ensuring the complete thermal destruction of organic compounds without generating toxic residues. The physics are in our favour. The infrastructure is not.

Pre-processing is not the support act for co-processing. It is the main event. Get the particle size wrong, get the moisture wrong, get the calorific value wrong and your kiln thermal stability will suffer the consequences.

The Regulatory Push Is Real

The Solid Waste Management (SWM) Rules 2026 mandate that cement plants progressively replace solid fossil fuels with Refuse-Derived Fuel (RDF), starting at a 5 per cent baseline and scaling to 15 per cent within six years. NITI Aayog’s 2026 Roadmap for Cement Sector Decarbonisation targets 20 to 25 per cent Thermal Substitution Rate (TSR) by 2030. Beyond compliance, every tonne of coal replaced by RDF generates measurable carbon reductions which is monetisable under India’s emerging Carbon Credit Trading Scheme (CCTS). TSR is no longer a sustainability metric. It is a financial lever.

Yet our own field assessments across multiple Indian cement plants reveal a sobering reality: the primary barrier to scaling AFR adoption is not waste availability. It is the fragmented and under-engineered pre-processing ecosystem that sits between the waste and the kiln.

Why Indian Waste Is a Different Engineering Problem

Indian municipal solid waste is not the material that imported shredding equipment was designed for. Our waste streams frequently exceed 40 per cent to 50 per cent moisture content, particularly during monsoon cycles, saturated with abrasive inerts including sand, glass, and stone. Plants relying on imported OEM equipment face months of downtime awaiting proprietary spare parts. Machines built for segregated, low-moisture waste fail quickly and disrupt the entire pre-processing operation in Indian conditions.

The two most common failures we observe are what I call the biting teeth problem and the chewing teeth problem. Plants relying solely on a primary shredder reduce bulk waste to large fractions, but the output remains too coarse for stable kiln combustion. Others attempt to use a secondary shredder as a standalone unit without a primary stage to pre-size the feed, leading to catastrophic mechanical failure. When both stages are present but mismatched in throughput capacity, the system becomes a bottleneck. Achieving the 40 to 70 tonnes per hour required for meaningful coal displacement demands a precisely coordinated two-stage process.

Engineering a Made-in-India Answer

At Fornnax, our response to these challenges is grounded in one principle: Indian waste demands Indian engineering. Our systems are built around feedstock homogeneity, the holy grail of kiln stability. Consistent particle size and predictable calorific value are the foundation of stable kiln combustion. Without them, no TSR target is achievable at scale.

Our SR-MAX2500 Dual Shaft Primary Shredder (Hydraulic Drive) processes raw, baled, or loosely mixed MSW, C&I waste, bulky waste, and plastics, reducing them to approximately 150 mm fractions at throughputs of up to 40 tonnes per hour. The R-MAX 3300 Single Shaft Secondary Shredder (Hydraulic Drive), introduced in 2025, takes that primary output and produces RDF fractions in the 30 to 80 mm range at up to 30 tonnes per hour, specifically optimised for consistent kiln feeding. We have also introduced electric drive configurations under the SR-100 HD series, with capacities between 5 and 40 tonnes per hour, already operational at a leading Indian waste-processing facility.

Looking ahead, Fornnax is expanding its portfolio with the upcoming SR-MAX3600 Hydraulic Drive primary shredder at up to 70 tonnes per hour and the R-MAX2100 Hydraulic drive secondary shredder at up to 20 tonnes per hour, designed specifically for the large-scale throughput that higher TSR ambitions require.

The Investment Case Is Now

The 2070 Net-Zero target is not a distant goal for India’s cement sector. It starts today, with decisions being made on the plant floor.

The SWM Rules 2026 are already in effect, requiring cement plants to replace coal with RDF. Carbon credit markets are opening up, and coal prices are not going to get cheaper. Every tonne of coal a cement plant replaces with waste-derived fuel saves money on one side and generates carbon credit revenue on the other. Pre-processing infrastructure is no longer just a compliance requirement. It is a business investment with a measurable return.

The good news is that nothing is missing. The technology works. The waste is available in every Indian city. The government has provided the policy direction. The only thing standing between where the industry is today and where it needs to be is the commitment to build the right infrastructure.

The cement companies that move now will not just meet the regulations. They will be ahead of every competitor that waits.

About The Author

Jignesh Kundaria is the Director and CEO of Fornnax Technology. Over an experience spanning more than two decades in the recycling industry, he has established himself as one of India’s foremost voices on waste-to-fuel technology and alternative fuel infrastructure.

Concrete

WCA Welcomes SiloConnect as associate corporate member

Published

3 weeks ago

April 13, 2026

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The World Cement Association (WCA) has announced SiloConnect as its newest associate corporate member, expanding its network of technology providers supporting digitalisation in the cement industry. SiloConnect offers smart sensor technology that provides real-time visibility of cement inventory levels at customer silos, enabling producers to monitor stock remotely and plan deliveries more efficiently. The solution helps companies move from reactive to proactive logistics, improving delivery planning, operational efficiency and safety by reducing manual inspections. The technology is already used by major cement producers such as Holcim, Cemex and Heidelberg Materials and is deployed across more than 30 countries worldwide.

Concrete

TotalEnergies and Holcim Launch Floating Solar Plant in Belgium

Published

3 weeks ago

April 13, 2026

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TotalEnergies and Holcim have commissioned a floating solar power plant in Obourg, Belgium, built on a rehabilitated former chalk quarry that has been converted into a lake. The project has a generation capacity of 31 MW and produces around 30 GWh of renewable electricity annually, which will be used to power Holcim’s nearby industrial operations. The project is currently the largest floating solar installation in Europe dedicated entirely to industrial self-consumption. To ensure minimal impact on the surrounding landscape, more than 700 metres of horizontal directional drilling were used to connect the solar installation to the electrical substation. The project reflects ongoing collaboration between the two companies to support industrial decarbonisation through renewable energy solutions and innovative infrastructure development.