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Base effect hides monthly decline

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Steel and cement sector witnessed a growth of 59.3 per cent and 7.9 per cent (YoY) respectively, which reflects the capex push provided by the Central and State governments. The decline in case of cement and steel production is mainly due to impact of the record surge in Covid-19 cases in May 2021 and the associated lockdowns on construction activity.

The Eight core sector should be read with caution again as the favourable base effect is again at play for the third consecutive month. In May 2021, core sector output rose by 16.8 per cent as against a contraction of 21.4 per cent in May 2020. On a month on month level comparison, there has been a marginal decline of 3.7 per cent which reflects the impact of the second wave of the Covid-19 pandemic and the associated lockdowns on business activities. One should note that May has been characterised by lockdowns of varied nature in both FY21 and FY22. The localised lockdowns during May??1 did have a bearing on output of the 8-core sector to some extent while the double-digit growth can be chiefly ascribed to the low growth number in May??020. There has been an upward revision in the core sector growth data for April??1 to 60.9 per cent (previous estimate: 56 per cent).

The double-digit Y-O-Y growth has been primarily driven strong growth registered in steel, natural gas and refinery products. Month-on-month improvement has been registered in case of fertilisers (ahead of kharif season), natural gas and coal production. The monthly index for May??1 is still 6.1 per cent lower than the pre-pandemic index of February??0 and 8.2 per cent lower than May??019 (the year prior to the pandemic). So far in FY22, the core sector output has witnessed a growth of 35.8 per cent compared with a de-growth of 29.4 per cent in the corresponding month last year but this purely a baseeffect phenomenon. There could be support from government capex as the fiscal numbers for this period show higher outlay on roads.

Key highlights

Coal production was higher by 6.9 per cent in May 2021 as against -14.1 per cent in May 2021. Despite the 2nd wave of the COVID19 pandemic disrupting business activities during the month, there has been a month-on-month improvement of 3.1 per cent in coal production on the back of revival in demand from the power sector.

Crude oil production fell by 6.3 per cent in May 2021, registering the 42nd consecutive monthly decline. The decline in production can be ascribed to adverse climatic conditions created by cyclone Tauktae, which hit the Indian west coast coupled with less than planned contribution from workover wells, drilling wells and old wells. The overall production has also been lower owing to lower consumer demand, infectivity issues in few wells, workovers and water knockouts.

Natural gas production rose by 20.1 per cent in May??021 compared with contraction of 16.7 per cent in May??020 mainly due to higher output from the PSC fields. However, production in government fields were low due to reduced gas production in Western Offshore due to cyclone Taukate, delay in commencement of gas production and less offtake by consumers due to Covid-19 issues. Natural gas production by Pvt/JVs companies in the PSC (production sharing contracts) regime has almost tripled on a YoY basis. This is due to increased contributions from D-34 field of KG DWN 98/3 and wells from satellite cluster.

Refinery production rose by 15.3 per cent in May??1 as against a de-growth of 21.3 per cent in May??020. There has however been a month-on-month decline of 4.6 per cent reflective of lower consumer demand amidst the localised lockdowns during the 2nd wave of the Covid-19 pandemic. Products that witnessed a rise in production were high speed diesel, petrol, liquefied petroleum gas, aviation turbine fuel and petcoke, while fuel oil and kerosene saw a fall in output during this month.

Fertiliser production declined to a 14-month low of 9.6 per cent in May 2021 compared with a high base of 7.5 per cent in May 2020. The m-o-m growth of 16.1 per cent can be ascribed fertilizer manufacturing companies increasing their production in May over April in anticipation of good demand ahead of the kharif sowing season. Along with this, the Centre increased the subsidy on fertilizers in mid-May after fertilizer producers announced their plans of increasing prices due to a surge in international feedstock prices. This hike in subsidies assuaged manufacturers??worries around a fall in demand from farmers. This is likely to have supported production too.

Steel and cement registered a growth of 59.3 per cent and 7.9 per cent (YoY) respectively which does reflect the capex push provided by the governments at both Centre and State level along with a low base effect. The m-o-m decline in case of cement and steel production highlights the impact of the record surge in Covid-19 cases in May 2021 and the associated lockdowns on construction activity. Labour shortages due to reverse migration also had a bearing on construction activities during May??021.

Electricity generation rose by 7.3 per cent in May 2021 as against a low base of 14.8 per cent in May 2020. However, there has been a month-on-month decline of 7.1 per cent as states imposed lockdowns to rein in the devastating effect of the second wave of the Covid-19 pandemic. The higher usage of electricity in residential locations during the summer season limited the monthly moderation to some extent.

CARE Ratings??View

There has been a dip in the core sector index for May??021 compared with the previous month which reflects the impact of the localised lockdowns on business activity. However, as economic activities, especially in the industrial segment were not significantly affected in June 2021, output of the core sector will witness an improvement. There has been a strong push for capex from the Government which will drive steel and cement while the advent of the kharif season will drive fertilizer production. The impact of the base-effect will continue in the next few months but will fade away subsequently. The IIP for the month of May??021 could range between 20-30 per cent though one should not read much into it.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

The article is authored by Sushant Hede, Associate Economist. He can be contacted on: Email: sushant.hede@careratings.com | Tel: 91-22-6837 4348

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.

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Concrete

JK Lakshmi Advances LC3 Cement Expansion

Company highlights commercial production and research partnerships

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The meeting reviewed progress in limestone calcined clay cement (LC3) technology and its commercial adoption in India’s cement sector, focusing on low-carbon alternatives to conventional binders. JK Lakshmi Cement noted that limestone calcined clay cement can reduce carbon dioxide emissions by up to 40 per cent compared with conventional cement and said this reduction supports industry decarbonisation. The company highlighted that it was among the first two cement manufacturers in India to move LC3 into commercial production after the Bureau of Indian Standards approved the technology as a cement standard.

Vinita Singhania said the transition of LC3 from research to commercial production reflected collaboration between industry, academia and international institutions. Maya Tissafi acknowledged JK Lakshmi Cement’s role in advancing LC3 adoption in India and its contribution in taking the technology from laboratory trials to commercial implementation. Both representatives underlined the growing relevance of sustainable construction materials as India expands infrastructure and urban development.

The meeting explored continued collaboration with Swiss research institutions such as EPFL, EMPA and ETH Zurich alongside Indian academic partners and development organisations. JK Lakshmi Cement has been associated with the LC3 initiative since 2014 and worked with EPFL, IIT Delhi, IIT Madras, Development Alternatives and Technology and Action for Rural Advancement. The company conducted one of the earliest industrial trials of LC3 and recently announced commercial production of Green Pro LC3 cement from its Jaykaypuram plant in Rajasthan.

India remains the world’s second-largest cement producer and expansion of infrastructure, urbanisation and housing demand continue to support long-term sector growth, increasing interest in low-carbon technologies. The company reported an annual turnover of more than Rupees (Rs) 60 bn and current cement capacity of about 18 million (mn) tonnes (t) per annum, with a target of reaching 30 million (mn) tonnes (t) by 2030. Apart from grey cement, the company also makes ready-mix concrete, gypsum plaster, wall putty, primers, adhesives and fly ash blocks, and both sides concluded on the need for continued collaboration to develop sustainable construction solutions.

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Concrete

Burnpur Cement Reports Standalone Net Loss Of Rs 207.4 Million

Standalone net loss of Rs 207.4 mn in March 2026 quarter

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Burnpur Cement reported a standalone net loss of Rs 207.4 million (Rs 207.4 million) for the quarter ended March 2026. The company said the loss reflects its financial performance for the period and will be reflected in its results filed with regulators. The announcement followed routine quarterly reporting by the listed cement manufacturer. Burnpur Cement is a cement manufacturer operating in India and serving construction markets, with operations spanning production, distribution and sales across the domestic construction sector.

The March 2026 quarter result marks a weakening in profitability for Burnpur Cement as market conditions in the sector remained challenging. The company attributed the outcome to operational and market factors, while outlining measures to manage costs and working capital. The reported standalone loss of Rs 207.4 million will be central to assessments by analysts and investors, which will be weighed alongside sector trends and company guidance. Management indicated continued focus on stabilising operations and optimising production efficiency.

No further numerical details were included in the initial summary, and consolidated figures were not disclosed in the brief notice, constraining immediate analysis of underlying drivers. The firm reiterated that it will provide comprehensive results and explanatory notes in its annual filing and investor communications. Analysts will assess the full disclosures when detailed financial statements become available. The timing of those detailed filings will determine how soon stakeholders can access full data.

Investors and stakeholders were advised to review the filings and the company’s releases for complete information, including cash flow and segmental performance, before drawing investment conclusions. The company’s operations and future guidance will determine recovery prospects in subsequent quarters. Regulatory disclosures and investor communications will guide market interpretation of the quarter and inform analyst forecasts. Burnpur Cement remains subject to the regulatory reporting process applicable to listed entities.

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Concrete

Ramco Cements Campaign Wins Six Kyoorius Honours

Hard Worker campaign wins Grand Prix for Eco Plaster film

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The Ramco Cements Limited’s Hard Worker campaign has achieved a major milestone at the prestigious Kyoorius Creative Awards, winning six honours including the coveted Grey Elephant Grand Prix for the Eco Plaster film. The awards were announced and presented at the Kyoorius Creative Awards Night 2026 held on 23rd May 2026 at the Jio World Convention Centre, Mumbai.

Competing alongside some of the country’s leading brands and agencies, the campaign received recognition across multiple creative categories, reaffirming the power of authentic storytelling rooted in the lives of hardworking people. The Eco Plaster commercial, which highlighted the importance of water conservation through innovative construction solutions, emerged as the campaign’s biggest winner, securing most of the honours.

The campaign’s wins include: 
Grey Elephant (Grand Prix) – Eco Plaster 
Blue Elephant – Best Film – Eco Plaster
Blue Elephant – Best Direction – Eco Plaster
Blue Elephant – Best Music – Eco Plaster
Baby Elephant – Best Direction -Tortoise & Hare
Baby Elephant – Best Use of Humour – Eco Plaster

Established in 2014, the Kyoorius Creative Awards recognise and celebrate creative excellence across India’s advertising, marketing and communications industries. Presented by Zee Entertainment Enterprises and powered by the USA-based The Clio Awards, the awards are regarded among the country’s most respected creative honours.

Known for their ethical and neutral judging process, the Kyoorius Creative Awards evaluate work purely on merit through a non-hierarchical awards structure, without Gold, Silver or Bronze distinctions. The iconic Elephant symbolises memorable work that leaves a lasting impact on the industry.

The Hard Worker campaign by The Ramco Cements Limited was conceived around the insight that true strength and progress are built through everyday hard work. Through emotionally resonant storytelling, distinctive craft and culturally rooted narratives, the campaign connected strongly with audiences across markets. The integrated campaign was rolled out across television, digital platforms, outdoor media and extensive on-ground activations, helping strengthen the brand’s connect with consumers, engineers, masons and trade communities alike.

Commenting on the achievement, A V Dharmakrishnan, CEO of Ramco Cements, said: “Winning at the Kyoorius Creative Awards is a proud moment for all of us. The Hard Worker campaign was created as a tribute to the spirit of hardworking people who form the backbone of our industry and our nation. These recognitions reaffirm our belief that authentic, meaningful storytelling has the power to create a deep and lasting connection with people.”

Balaji K Moorthy, Executive Director – Marketing, Ramco Cements, added: “The Hard Worker campaign was built on a simple but powerful insight – that hard work deserves recognition and respect. We wanted the communication to feel rooted, emotional and culturally relevant while also pushing creative boundaries. Winning six honours, including the Grey Elephant Grand Prix, is a tremendous validation of the idea, the craft and the collaborative effort of everyone involved in the campaign.”

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