Connect with us

Concrete

Core sectors output grew marginally by 0.1% in Jan 2021

Published

on

Shares

In January 2021, the eight core sectors output grew marginally by 0.1 per cent compared with 0.2 per cent in December 2020 and 2.2 per cent in the corresponding month last year. The growth in the last two months has been positive albeit anaemic and to some extent this reflects weakness in the physical production. There has been a broad based decline across all sectors except fertilisers, steel and electricity. The core sector output for December 2020 has been revised upwards from -1.25 per cent to 0.2 per cent.

The cumulative index of eight core sector during April-January 2021 registered a de-growth of 8.8 per cent on account of the nation-wide lockdown imposed in March which adversely impacted the industrial production compared with positive growth of 0.8 per cent in the corresponding period last year. All sectors except fertilisers contracted during this period. Double digit contraction was registered in natural gas, refinery, steel and cement.

Key highlights

Coal production contracted by 1.8 per cent registering de-growth for the first time in the last five months, primarily on account of a high base effect.

Crude oil production fell by 4.6 per cent in January 2021. Technical mishaps due to COVID-19 implications, reservoir issues and shut in of wells and delays in field development activities have led to the fall in production. Domestic production has been falling with the ageing of existing fields and muted response from the industry to take up new projects, mainly due to lack of adequate incentives. Moreover, higher import of crude oil and limitations on domestic exploration have weighed on the crude oil production.

Natural gas production contracted by 2 per cent in January 2021 mainly due to a fall in output of a major gas producer/explorer. Though it continued to remain in the negative territory there has been a sequential improvement in output compared with -7.2 per cent growth in the previous month.

Refinery production fell by 2.6 per cent in January 2021. Refinery production continued to remain in the negative territory for the 11th consecutive month. However, refinery capacity utilisation for the month was 105 per cent and it has been improving with each passing month indicating that the economy is slowly reflating and getting back to normalcy.

Fertilisers production registered a growth of 2.7 per cent in January 2021. Increase in fertilizer production can be ascribed to build-up of stocks by companies and increase in production of Complex fertilizers and DAP. The demand for these fertilizers is usually high during the rabi season.

Steel output grew by 2.6 per cent after contracting over November-December 2020. Higher automotive sales, robust demand from rural segment on the back of good monsoon and government spending on infrastructure has led to faster ramp up in production levels.

Cement output registered a de-growth of 5.9 per cent in January 2021. Slow pick up in institutional government projects is the key reason for this fall.

Electricity production grew by 5.1 per cent registering positive growth for the 5th consecutive month as a result of recovery in business sentiment and services.

CARE Ratings??view

Going ahead the growth in the eight core sectors will be conditional upon the pace of economic recovery and high base effect. However, there continues to be uncertainty over re-imposition of Covid-19 restrictions amid rising level of infections. The IIP growth for the month can be positive (but less than 1 per cent) contingent upon support by consumer oriented industries.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

Akanksha Bhende, Associate Economist, CARE Ratings

Disclaimer: This report is prepared by CARE Ratings Limited. 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.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Concrete

NCLT approves Burnpur Cement’s capital reduction scheme

The move aims to optimise the capital structure of the company.

Published

on

By

Shares

The National Company Law Tribunal (NCLT), Kolkata, has approved Burnpur Cement Limited’s scheme for the reduction of capital, as outlined in an exchange filing by the company. The petition was filed under Section 66 of the Companies Act, 2013, in accordance with the National Company Law Tribunal (Procedure for Reduction of Share Capital of Companies) Rules, 2016.

The approved scheme involves reducing the company’s issued, subscribed, and paid-up equity share capital from Rs 86.12 crore, divided into 8,61,24,363 equity shares of Rs 10 each, to Rs 17.22 crore, divided into 1,72,24,873 equity shares of Rs 10 each, fully paid-up. The move aims to optimise the capital structure of the company.

The NCLT order specifies that the capital reduction will not affect any ongoing actions by government or regulatory authorities related to violations of any laws in force. Burnpur Cement is expected to file the certified copy of the order with the Registrar of Companies (RoC) in e-form INC-28.

The bench hearing the matter included D. Arvind (Technical Member) and Bidisha Banerjee (Judicial Member).

Continue Reading

Concrete

Cement manufacturers report margin decline in September quarter amid lower prices

The all-India average cement price saw a year-on-year decline of 11%

Published

on

By

Shares

Cement manufacturers have reported a decline in margins during the September quarter, primarily due to lower prices, which led to reduced sales realization. Smaller companies such as Nuvoco Vistas Corp, JK Cement, Birla Corporation, and Heidelberg Cement experienced a drop in both topline and sales volume. However, leading players like UltraTech Cement, Ambuja Cement, and Dalmia Bharat performed better, primarily due to several recent acquisitions that have bolstered their market position.

The industry faced challenges, including an extended monsoon, floods, and slow government demand, all of which contributed to weak market conditions. Despite these challenges, power, fuel, and other operational costs remained stable.

In terms of pricing, the all-India average cement price saw a year-on-year decline of 11% from ₹348 per 50 kg bag in June 2024 to ₹330 per bag in September, although it rose by 2% month-on-month. In FY25, the average cement price saw a 10% year-on-year reduction, down from ₹365 per bag in FY24.

UltraTech Cement reported a 68% capacity utilization and a 3% growth in sales volume, despite an 8.4% year-on-year decline in sales realization for grey cement. Similarly, Ambuja Cements saw a 9% increase in sales volume, reaching 14.2 million tonnes, but its EBITDA was 15% lower year-on-year at ₹1,074 crore due to lower price realizations.

Continue Reading

Concrete

JK Lakshmi Cement Posts Loss

JK Lakshmi Cement records ?19.24 crore loss.

Published

on

By

Shares

JK Lakshmi Cement reported a net loss of ?19.24 crore for the second quarter of FY25, reversing the previous year’s profits. The cement giant faced a challenging period, with rising input costs and subdued demand in certain markets impacting its financial performance. The company also noted a decline in sales volumes during the quarter, which further contributed to the loss.

Despite the tough quarter, the company remains optimistic about its long-term prospects, citing the ongoing demand for infrastructure development and the potential for recovery in key regions. The management is focusing on cost optimization strategies and exploring new markets to overcome the current challenges.

The net loss marks a significant deviation from the company’s usual profit trajectory, raising questions about the impact of macroeconomic factors and inflationary pressures on the cement sector as a whole. With raw material costs and transportation expenses climbing, the company is grappling with maintaining margins while trying to sustain its market position.

JK Lakshmi Cement’s management is working to boost operational efficiency and improve financial health in the coming quarters. Analysts are keenly observing whether the company will rebound in the second half of the fiscal year, as infrastructure projects and government spending are expected to provide support to the industry.

Continue Reading

Trending News

SUBSCRIBE TO THE NEWSLETTER

 

Don't miss out on valuable insights and opportunities to connect with like minded professionals.

 


    This will close in 0 seconds