Concrete

Core sectors output growth remain negative for Nov 2020

Published

5 years ago

July 1, 2021

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In November 2020, the eight core sectors output growth remained in a negative trajectory for the ninth successive month. Rather after showing an improvement in September 2020, it has been deteriorated persistently in October 2020 and November 2020. During the month, the eight core sectors output contracted by 2.6 per cent year on year as against the 0.7 per cent growth in the same month of last year. The output growth during the month was also lower than the 0.6 per cent de-growth in October 2020. The decline in growth can be ascribed to persistent fall in crude oil, refineries, natural gas, steel output.

For October 2020, the core sector growth has been revised upwards from -2.5 per cent (prov.) to -0.9 per cent (first revision) on account of improved production in steel, cement and electricity sector.

The cumulative index of eight core sector during April ??November 2020 contracted by 11.4 per cent indicative of the adverse impact on industrial production during the lockdown period compared with the 0.3 per cent growth in the corresponding period of last year. There was a broad based contraction across sectors during this period barring fertilizer, the output of which grew by 3.8 per cent due to favourable monsoon and sowing season this year.

Key highlights:

Coal production growth slowed in November 2020 and the output grew by 2.9 per cent at a four month low (11.7 per cent growth in October 2020). However, it was better when compared with the 3.5 per cent contraction in the same month of FY20. Revival in demand for power post easing in lockdown and resumption of industrial activities has along with favourable base has led to increase in output in coal.

Crude oil production contracted for three successive years. In November the crude oil production declined at a slower 4.9 per cent compared with the 6 per cent de-growth in November 2020. Fall in production can be ascribed to low realisations due to Covid restrictions/lockdown, technical mishaps due to Covid-19 implications, reservoir issues and shut in of wells and reduced off take.

Natural gas production also declined for nearly 2 years. In November 2020, the natural gas output contracted by 9.3 per cent, higher than the 6.4 per cent decline in November 2019. Closure of Gas wells in western offshore due to Hazira Plant shutdown, low upliftment/demand of gas by the major customers like power plants, bandhs/blockade by local people and associations, etc. after the Baghjan Blowout among others weighed on overall production during the month.

Refinery production, having high weightage in eight core (28 per cent), contracted for successive 9 months in a row. However, the pace of contraction moderated in November 2020 to -4.8 per cent compared with the -17 per cent de-growth in the previous month. In November 2019, however, the refinery output had grown by 3.1 per cent. Low capacity utilisation and low product demand due to Covid impact led to decline in production during the month.

Fertilizer output, grew by 1.6 per cent in November 2020, lower than the 13.6 per cent growth in November 2019 and 6.3 per cent in October 2020. Expected increase in demand during the ongoing Rabi season might have supported the growth during the month.
Output of steel sector contracted for the first time in the past 4 months in November 2020 by 4.4 per cent as against the 7 per cent growth in November 2019 and 4 per cent growth in October 2020. Low demand from automobile sector, high raw material costs and relatively muted construction activities with lockdown imposition in parts of the country must have weighed on the steel production.
After witnessing a revival in October 2020, the cement production took a hit in November 2020 and contracted by 7.1 per cent compared with the 4.3 per cent growth in November 2019 on account of likely muted construction activities with resurgence in infection cases and subsequent restrictions on activities.
Electricity production grew by 2.2 per cent albeit at a slower pace by 2.2 per cent in November 2020 than the 11.2 per cent growth in the previous month but was better than the 4.9 per cent contraction in the same month of last year.

CARE Ratings??View

Going ahead, the eight core sectors growth would be contingent on the ease in restrictions along with high base effect. On account of fall in eight core sector growth the IIP growth for this month could see only marginal improvement between 0 to 1 per cent.

Courtesy: CARE Ratings

ABOUT THE AUTHOR

Dr Rucha Ranadive, Economist, CARE Ratings. Can be contacted at: rucha.ranadive@careratings.com | Tel: +91-22-6837 43406

Disclaimer: This report is prepared by CARE Ratings Ltd. 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

Dalmia Acquires Five Point Two MnTPA Cement Assets in Central Region

Acquisition adds capacity, power and rail access

Published

17 hours ago

May 26, 2026

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Dalmia Cement (Bharat) Limited (DCBL) executed a business transfer agreement on 21 May 2026 to acquire a cement undertaking from Jaiprakash Associates Limited (JAL) and Adani Infra (India) Limited. The assets include plants at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh with five point two million tonnes per annum (mn tpa) cement capacity and three point three mn tpa clinker capacity, plus 99 megawatt (MW) thermal power and railway sidings. The transaction carries an enterprise value of Rs 28.5 billion (bn).

DCBL, a wholly owned subsidiary of Dalmia Bharat Limited (DBL), will see cement capacity rise to 54.7 mn tpa on completion. Ongoing expansions at Belgaum, Pune and Kadapa are expected to raise capacity to 66.7 mn tpa by the second to third quarter of fiscal 2028. The company said the transaction would be consummated within two weeks.

The deal follows a framework signed in December 2022 to settle long running disputes with JAL, including a long term clinker supply arrangement. Completion was delayed when JAL entered insolvency and the earlier sale did not finalise. Following approval of a resolution plan under the Insolvency and Bankruptcy Code, DCBL executed a fresh business transfer agreement to resolve pending legal and arbitral matters.

Company statements described the acquisition as strategic, accelerating access to central markets compared with a greenfield route and offering scope for expansion through debottlenecking and brownfield investment. Proximity to the company’s captive mines and established vendor relationships should support faster ramp up. The assets should augment EBITDA delivery and enhance returns by enabling entry into newer markets with relatively better prices.

Senior executives said the addition aligned with a long term plan to build a pan India presence and would provide a head start in central markets. They noted that familiarity with the plants under earlier tolling arrangements offers operational insight and strengthens channel relationships, supporting quicker market entry. Management expressed confidence that the assets’ expansion potential would generate value for stakeholders.

Concrete

Ramco Cements Reports FY26 Revenue Growth And Higher Profit

Net debt reduced as exceptional items boost FY26 earnings

Published

17 hours ago

May 26, 2026

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Ramco Cements reported standalone audited results for FY26 with net revenue of Rs 90,560 million (mn) and profit after tax of Rs 6,940 mn. EBIDTA rose to Rs 14,820 mn and blended EBIDTA per tonne was Rs 788 on a two per cent volume rise to 18.81 million (mn) tonne (t). Cement revenue increased by five per cent and construction chemicals revenue rose by 66 per cent.

Raw material cost per tonne rose to Rs 1,023 from Rs 956 mainly due to a mineral bearing land tax of Rs 160 per t in Tamil Nadu, adding about Rs 86 per t. Power and fuel cost per tonne fell to Rs 1,098 from Rs 1,123 with petcoke mix down to 47 per cent and green power up to 40 per cent.

Profit before tax after exceptional items was Rs 8,790 mn. Net exceptional items were Rs 5,530 mn, including Rs 5,740 mn from sale of surplus land and Rs 200 mn of past service cost. The company monetised Rs 10,980 mn from non core asset sales over the past two years and recorded capex of Rs 9,970 mn, with guidance of Rs 8,000 mn for FY27.

Net debt fell by Rs 8,170 mn to Rs 36,640 mn at 31 March 2026 and cost of debt eased to 7.29 per cent, reducing net debt to EBIDTA to 2.47 times. Management indicated the full impact of higher fuel costs is expected from Q2 FY27, while packing and diesel cost increases will be visible in Q1 FY27. The board has proposed a dividend of Rs two point five zero per equity share and the company flagged risks from elevated fuel and logistics costs, commodity volatility and competitive pricing.

Concrete

Dalmia Cement to Acquire 5.2 MnTPA Capacity

Deal covers cement assets in Madhya Pradesh and Uttar Pradesh

Published

17 hours ago

May 26, 2026

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Dalmia Cement (Bharat), a wholly owned subsidiary of Dalmia Bharat, has executed a Business Transfer Agreement with Jaiprakash Associates and Adani Infra (India) to acquire cement assets with 5.2 MnTPA capacity in the Central region.

The acquisition covers cement plants located at Rewa in Madhya Pradesh, and Churk, Chunar and Sadwa in Uttar Pradesh. The assets include 5.2 MnTPA cement capacity, 3.3 MnTPA clinker capacity, 99 MW thermal power capacity, railway sidings at Rewa and Chunar, and a common railway siding at Churk. The enterprise value of the transaction is Rs 28.5 billion.

Following completion of the transaction, Dalmia Bharat’s cement capacity will increase to 54.7 MnTPA. Its ongoing expansion projects at Belgaum, Pune and Kadapa are expected to further raise capacity to 66.7 MnTPA by the second or third quarter of FY28. The transaction is expected to be completed within two weeks.

Dalmia Cement had entered into a framework agreement with Jaiprakash Associates in December 2022 for the sale of business assets and related agreements, including a business transfer agreement and cement sale purchase agreement. The agreements were intended to settle disputes between the parties, including those under the long-term clinker supply agreement. However, the transaction could not be completed after Jaiprakash Associates was admitted to insolvency.

Following approval of the Adani Group’s resolution plan for Jaiprakash Associates under the Insolvency and Bankruptcy Code, Dalmia Cement requested that the earlier agreement be considered to settle pending disputes. The company has now executed a fresh Business Transfer Agreement with Jaiprakash Associates and Adani Infra (India) for the cement undertaking.

The acquisition supports Dalmia Bharat’s strategy to become a pan-India cement player and provides faster access to Central markets compared to a greenfield project. The assets also offer expansion potential through debottlenecking and brownfield development.

Puneet Dalmia, Managing Director and CEO, Dalmia Bharat, said the assets are a strong strategic fit and will help the company serve high-potential markets in the Central region. He added that the expansion potential of the assets and their proximity to Dalmia’s captive mines could help create a future capacity hub.