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.

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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

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

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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

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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

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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.