Economy & Market

Core industries’ output contracts 23.4% in May

Published

5 years ago

January 7, 2020

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The eight core sector industrial output has contracted by 23.4 per cent (prov.) in May 2020 as against 3.8 per cent growth in the corresponding period a year ago.

In view of nationwide lockdown during April and May 2020 due to Covid-19 pandemic, various industries viz. coal, cement, steel, natural gas, refinery, crude oil, etc.

experienced substantial loss of production. However, in the month of May 2020, eight core industries output improved in terms of a lower decline of -23.4 per cent compared with -37 per cent last year.

The eight core sector industrial output has contracted by 23.4 per cent (prov.) in May 2020 as against 3.8 per cent growth in the corresponding period a year ago.

However, the output decline in the month has been lower than that in April 2020 (37 per cent). The estimate for the month of April 2020 has been revised upwards from earlier 38.1 per cent de-growth to 37 per cent in the latest press release due to revision in cement and steel production.

During April-May 2020, the eight core industrial output grew contracted by 30 per cent compared with 4.5 per cent growth during the first two months of 2019-20 led by contraction in output across industries barring fertilizers (2 per cent growth).

Highlights:
Coal production declined by 14 per cent in May 2020 as against 1.7 per cent growth in May 2019 but has been lower than -15.5 per cent in April 2020. This is mainly due to poor demand owing to high coal stocks with the power stations.
Production of crude oil fell at faster pace by (-) 7.1 per cent compared with a decline by 6.9 per cent in the same month a year ago and -6.4 per cent a month ago. Low demand due to the Covid-19 pandemic, declining drawdowns from aging fields, closure of wells in Western offshore due to less off take by GAIL due to pandemic, restriction of movements for field operations in onshore fields amidst lockdown led to decline in production. A blow out incident at oil field in Assam on May 27, 2020 was weighed on production.
Natural gas output too has contracted by 16.8 per cent yoy, higher than the -0.1 per cent de-growth in May 2019 due to no gas off take by consumers in onshore due to Covid-19 lockdown.
Output of petroleum refinery products, which has higher weightage in eight core industries, contracted by 21.3 per cent compared with -1.5 per cent growth in the same month a year ago. The major reason for lower production of petroleum products is lower due to lower demand due to impact of COVID-19 lockdown.
Fertilizers production has grown by considerable 7.5 per cent in May 2020 as against a 1 per cent decline in May 2019 and -4.5 per cent in April 2020. Early onset of monsoon and pick up in kharif sowing has led to increase in production to meet improved demand.
Steel production registered de-growth by 48.4 per cent compared with 13.3 per cent growth in the corresponding month a year ago due to low demand from auto and construction sector. However, it showed signs of improvement than that in April 2020 backed by renewed domestic demand from easing in the lockdown restrictions and improved exports.
Cement production contracted by 22.2 per cent as against 2.8 per cent growth in May 2019. The decline in production was lower than that in April 2020. Although the construction activities resumed partially with ease in lockdown restriction, lower demand ahead of monsoon arrival weighed on production.
Electricity generation has decreased by 15.6 per cent compared with the 7.4 per cent growth in the same month a year ago, though it has improved marginally when compared with April 2020 aided by increase in demand for power by residents due to high temperatures and partial resumption of industrial activities after the ease in lockdown restrictions.

CARE Ratings’ view
In June 2020, core sector may show further signs of improvements as the country opened up some more economic activity including nonessential services, but will remain in negative zone. We may expect the industrial output growth based on IIP to remain in the negative bracket based on the eight core industries which has 40 per cent weightage in IIP.

Courtesy: Core Sector: May 2020

Footnote:
Authored by: Dr. Rucha Ranadive, Economist
Email: rucha.ranadive@careratings.com |
Tel: 91-22-68374406

Madan Sabnavis, Chief Economist
Email: madan.sabnavis@careratings.com |
Tel: 91-22-68374433

Disclaimer: This report is prepared by CARE Ratings. CARE Ratings has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Ratings is not responsible for any errors or omissions in analysis/inferences/views or for results obtained from the use of information contained in this report and especially states that CARE Ratings has no financial liability whatsoever to the user of this report.

Concrete

15th Cement EXPO: A Step Forward in Cement Innovation

Published

3 weeks ago

January 17, 2025

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Mumbai

Following the immense success of the 14th Cement EXPO, held on December 14-15, 2023, at the Manekshaw Centre, New Delhi, the next edition of this premier event is set to take place in March 2025. The 15th Cement EXPO will be hosted at Yashobhoomi, Delhi, on 12th and 13th November 2025.

Meanwhile, the Cement Expo Forum 2025 is scheduled for 5th and 6th March 2025 at Taj Krishna in Hyderabad. This exciting 3-in-1 event, organised by FIRST Construction Council (FCC) and Indian Cement Review (ICR), will bring together industry leaders, innovators, and stakeholders to discuss the future of the cement sector.

Building on the Success of the 14th Cement EXPO

The 14th Cement EXPO was widely praised for its strong participation, attracting over 1,500 senior managers and decision-makers from across the cement industry. The event was inaugurated by Dr. Vibha Dhawan, Director General of TERI, and Ali Emir Adiguzel, Founder and Director of the World Cement Association, alongside Pratap Padode, Founder of FIRST Construction Council (FCC). The two-tiered exhibition space featured cutting-edge products and innovations from top companies within the cement industry’s supply chain.

The event also garnered significant support from key government bodies, including the Ministry of Road Transport and Highways, Government e-Marketplace (GeM), and the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India (GoI).

Recognition and Excellence in the Cement Industry

The 7th Indian Cement Review Awards celebrated excellence by presenting awards to 11 companies in various categories, recognising their contributions to growth and innovation within the industry. Notably, Parth Jindal, Managing Director of JSW Cement, was honoured with the prestigious Indian Cement Review – Person of the Year Award 2023. Meanwhile, Vinita Singhania, Vice Chairman and Managing Director of JK Lakshmi Cement Ltd, received the Lifetime Achievement Award for her outstanding leadership and contributions to the sector.

A Vision for Sustainability

With the theme of “Driving Sustainability Through Technology,” the 9th Indian Cement Review Conference hosted thought-provoking discussions and presentations, highlighting the industry’s commitment to adopting innovative, sustainable practices. The conference served as a platform for dialogue on the latest technological advancements aimed at transforming the cement sector, addressing key challenges, and fostering growth.

What to Expect from Cement EXPO 2025

The 15th Cement EXPO, along with the 10th Indian Cement Review Conference and the 8th Indian Cement Review Awards, is set to be even bigger and more impactful than the 2023 edition. With an expanded exhibition space, greater participation, and more in-depth discussions, the 2025 event will continue to drive the industry forward. This 3-in-1 event promises to be a pivotal moment in the ongoing transformation of the cement sector.

As the industry evolves, the 15th Cement EXPO 2025 will serve as a crucial platform for showcasing innovations, discussing emerging trends, and forging new partnerships to shape the future of cement and construction.

For more details:

Cement Expo Forum 2025: https://cementexpo.in/forum

15^th Cement Expo 2025: https://cementexpo.in/

FOR CONFERENCE SPONSORSHIPS

Sheetal Talreja

Mob: +91 842 2874 030

Email: sheetal@IndianCementReview.com

FOR EXHIBITION/SPONSORSHIPS

Sujoy Gomes

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FOR SPONSORSHIPS

Ratan Rajbhar

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Concrete

Construction sector growth slows to 8-10% for FY2025: ICRA

Published

3 weeks ago

January 15, 2025

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The revenue growth for construction companies in FY2025 is projected at 8-10 per cent, down from the earlier estimate of 12-15 per cent, according to ICRA. This marks the slowest growth in three years, driven by factors such as the Model Code of Conduct in Q1, prolonged monsoons, and milestone-based billing in Q2, particularly affecting road-focused players.
ICRA’s analysis of 19 companies with a combined turnover of Rs.1.28 trillion in FY2024 shows modest revenue growth of 1.5 per cent YoY in H1 FY2025. While execution is expected to improve in H2, FY2025 growth remains below the historical CAGR of ~15 per cent (FY2018-FY2024).
Order inflows in urban transport, water and sewage projects are healthy, but road-focused entities face challenges due to muted inflows and high competition. Operating margins are projected to remain range-bound at 10.5-11 per cent, with debt levels rising to manage working capital needs, though debt coverage metrics remain stable.

Concrete

SANY India expands Pune factory to boost production capacity

Published

3 weeks ago

January 15, 2025

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SANY India inaugurated a cutting-edge factory expansion at its 90-acre Pune facility, elevating its production capacity to over 14,000 units annually, alongside a robust fabrication capacity of 100,000 metric tonnes.

The advanced facility reinforces SANY’s commitment to ‘Make in India’ by enhancing localised manufacturing and supporting global exports. Chairman Xiang Wenbo highlighted the strategic importance of India as a global hub, while Vice Chairman Deepak Garg emphasised the expansion’s role in driving innovation and infrastructure development. This investment enhances efficiency, reduces timelines, and strengthens SANY’s leadership in the construction equipment sector.