Concrete

Core sectors output grew marginally by 0.1% in Jan 2021

Published

5 years ago

March 5, 2021

admin

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.

Concrete

Lokesh Lays Stone For Rs 31 Billion Cement Unit In Kadapa

Line-2 expansion to make Kadapa a major cement hub

Published

5 days ago

July 20, 2026

admin

Andhra Pradesh Education and IT Minister Nara Lokesh on Wednesday laid the foundation stone for the Line-2 expansion of Dalmia Bharat Cement at Chinnakomerla village in Mylavaram Mandal in Kadapa district. The project carries an investment of Rs 31 billion (bn) and is slated for completion by the third quarter of the financial year 2028. The expansion is intended to boost industrial growth and employment generation across the Rayalaseema region.

Once commissioned, the Kadapa facility will become Dalmia Bharat’s largest integrated cement manufacturing ecosystem in southern India, creating over 1,000 direct and indirect jobs and opening new business avenues for regional micro, small and medium enterprises and transport operators. Lokesh said the expansion signalled growing corporate confidence in the state and reflected the practical ease of doing business that secured repeat investment.

He placed the project within the government’s wider economic targets and recalled the Yuvagalam padayatra commitment to generate two million (mn) jobs within five years, noting that the state would cultivate talent while industry created opportunities. Lokesh highlighted Andhra Pradesh’s competitive pursuit of major manufacturing accounts, mentioning past successes and a personal initiative to engage global investors when persuading them to anchor expansion in the state.

The plant will leverage Kadapa’s abundant limestone reserves to scale production and sustainability. Clinker capacity is planned to rise from two point five million tonnes per annum (mn tpa) to six point one mn tpa, while overall cement output will increase from three point six mn tpa to nine point six mn tpa. The unit is designed to operate on over eighty per cent renewable energy and deploy waste heat recovery, zero liquid discharge, water recycling and advanced AI systems to optimise efficiency. Industries Minister TG Bharat, BC Welfare Minister S. Savitha and Jammalamadugu MLA C. Adinarayana Reddy attended the ceremony.

Concrete

Cement Prices to Stay Flat in Q2 FY27 as Costs Squeeze Margins

HDFC Securities warns monsoon slowdown and higher fuel costs

Published

1 week ago

July 17, 2026

admin

HDFC Securities has said the cement industry is unlikely to register a sequential increase in prices in Q2 FY27 as monsoon-related demand moderation coincides with rising fuel and packaging costs that will squeeze margins. The brokerage observed that price gains remained modest, with increases of two to three per cent quarter-on-quarter across regions, and noted subdued offtake in May with improvement in June as a delayed monsoon supported construction activity. The brokerage added that modest pricing gains so far have been insufficient to offset the input cost escalation.

The report stated that input cost pressures intensified in Q1 FY27 owing to the West Asia conflict, which pushed up coal and pet coke prices and is expected to keep fuel costs elevated, with a likely peak in Q2 FY27. It assessed that total variable costs, including packing, could rise by around Rs 150 per t quarter-on-quarter and that lower offtake and seasonal operating deleverage could further raise operating expenditure by about Rs 50 per t quarter-on-quarter.

Overall, cement prices were estimated to remain flat in Q2 FY27 as monsoon-led demand weakness offsets limited upside in realisation, and rising fuel costs alongside seasonal deleverage were expected to compress industry margins by over Rs 100 per t quarter-on-quarter to below Rs 880 per t. The brokerage indicated that the combined impact of energy inflation and higher packing expenditure would be the principal drivers of margin contraction in the near term. HDFC Securities projected a recovery in margins in H2 FY27 should the West Asia turmoil subside and energy and packing costs cool off.

The brokerage expressed optimism on long-term demand fundamentals and said improving realisation together with an anticipated cost cool-off should support a margin rebound from H2 FY27 onward, underpinning favourable industry prospects over the medium term. Its outlook rests on monsoon normalisation and a decline in imported fuel prices in the second half of the fiscal year.

Concrete

Dalmia Bharat Begins Rs 31 Bn Green Cement Unit in Kadapa

New Andhra Pradesh plant to add 9.6 MTPA cement capacity by FY28

Published

1 week ago

July 16, 2026

admin

Dalmia Bharat Limited recently laid the foundation stone for its second manufacturing unit at Kadapa in Andhra Pradesh. The company will invest Rs 31 billion in developing the next-generation integrated cement manufacturing facility.

The foundation-laying ceremony was attended by Nara Lokesh, Andhra Pradesh Minister for Information Technology, Electronics and Communications, Real-Time Governance and Human Resources Development, along with Puneet Dalmia, Managing Director and Chief Executive Officer, Dalmia Bharat, senior government officials and company representatives.

Scheduled to be commissioned by the third quarter of FY28, the Kadapa unit will become Dalmia Bharat’s largest integrated manufacturing facility in southern India. It will have a clinker production capacity of 6.1 million tonnes per annum and a cement manufacturing capacity of 9.6 million tonnes per annum.

The facility is designed to produce what the company describes as one of the world’s greenest cements. It is also expected to generate approximately 1,000 direct and indirect employment opportunities while supporting local MSMEs, transporters, contractors and service providers.

Lokesh said the investment reflected Dalmia Bharat’s confidence in Andhra Pradesh and aligned with the state’s objective of promoting sustainable industrialisation, job creation and technology-led economic growth.

Puneet Dalmia said the project represented the company’s long-term vision of developing low-carbon cement manufacturing assets. He added that the facility would establish new benchmarks in operational efficiency and sustainability while supporting India’s infrastructure and environmental goals.

Dalmia Bharat will also expand its regional community development programmes in education, healthcare, skill development and welfare through its DIKSHa and Gram Parivartan initiatives.

The company currently has an installed cement manufacturing capacity of 54.7 million tonnes across 19 manufacturing units in 12 states. It is also the first cement company globally to commit to the RE100, EP100 and EV100 initiatives.