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Credit Suisse expects better prospect for cement firms

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In the next two years, prospect of cement companies may improve as supply pressure eases and demand rises, a research report by Credit Suisse shows.

Cement firms have been battling supply glut because of excess capacity, which was built in anticipation of strong demand from the infrastructure projects.

But the infrastructure development slowed down considerably (thanks to the policy paralysis of the government coupled with corruption and global slowdown) and demand failed to match the rise in supply.

But the report expects the cement upcycle to continue at least for the next two years with accretive price increases leading to margin expansion. Capacity additions should peak out in 2013-14 and production discipline should imply a recovering 2013-14 and a stronger 2014-15, the report notes.

The higher outlay announced in the recent Union Budget for rural infrastructure development may improve demand foe cement, the report notes. The budget raised allocation for Prime Minister’s Rural Roads Programme (PMGSY) and rural housing (Indira Awas Yojna).

Credit Suisse expects ACC and Grasim to outperform in the next 12 months while it is neutral on UltraTech Cement and Ambuja Cement. None of the south-based cement companies were covered in the report though.

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Concrete

Shree Cement reports 2025 financial year results

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Shree Cement posted revenue of US$2.38 billion for FY2025, marking a 5.5 per cent decline year-on-year. Operating costs rose 2.9 per cent to US$2.17 billion, resulting in an EBITDA of US$528 million—down 12 per cent from the previous year. Net profit fell 50 per cent to US$141 million. The company reported cement sales of 9.84Mt in Q4 FY2025, a 3.3 per cent increase from 9.53Mt in Q4 FY2024, with premium products making up 16 per cent of total sales.

Image source:https://newsmantra.in/

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Concrete

Rekha Onteddu to become director at Sagar Cements

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Sagar Cements has announced the appointment of Rekha Onteddu as a non-executive independent director, effective 30 June 2025. According to People in Business News, Rekha Onteddu is currently serving in a similar capacity at Andhra Cements, the parent company of Sagar Cements.

Image source:https://sagarcements.in/

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Concrete

India’s cement consumption set to rise

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According to a Moody’s report, India’s cement consumption is projected to rise by 50 per cent over the next five years, increasing from 445 million metric tons per annum (MMTPA) in FY24 to 670 MMTPA by 2030. This growth is expected to be driven by government infrastructure spending and rising housing demand, with an anticipated annual growth rate of 6-7 per cent. To meet this demand, major cement companies are likely to continue acquiring smaller, less profitable firms.

Image source:https://www.telegraphindia.com/

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