Concrete

Core sectors register notable improvement in Sept 2020

Published

5 years ago

October 19, 2021

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The eight core sectors registered a notable improvement in September 2020 recording a marginal fall of 0.8 per cent compared with negative growth of (-) 7.3 per cent in August 2020 and (-)5.1 per cent in the corresponding month last year. This recovery in the core sector has been on account of double digit growth in the coal segment and positive growth in the electricity segment for the first time in the last seven months. Positive growth recorded in coal, steel and electricity does indicate that the unlock programme has had a positive impact on these three segments. Moreover, a low base effect has also led to a perceptible pick-up in September 2020. Despite the sharp recovery, the core sector index has declined for the seventh consecutive month. The oil segments continue to record negative growth along with the cement and fertilisers segment.

There has been an improvement in the estimate for August wherein the fall is (-)7.3 per cent as against the earlier estimate of (-)8.5 per cent. During April-September 2020, the core sector output has contracted by 8 per cent as against a positive growth of 1.3 per cent during the same period of FY20, which can be ascribed to the coronavirus pandemic induced nation-wide lockdown that brought production activities to a near standstill. All sectors barring fertilizers registered de-growth in industrial output during the first half of FY21.

Key highlights:

l Coal production recorded its highest growth in the new series, registering a double digit growth of 21.2 per cent reflective of resumption of industrial activities and higher thermal power demand. A negative base (-20.5 per cent in September 2019) also supported the growth in coal production.

l Crude oil production contracted by 6 per cent in September 2020 compared with a negative growth of (-)6.3 per cent in August 2020 and (-)5.3 per cent in the corresponding month last year. This is the 34th consecutive month in which crude oil production has recorded a contraction. This fall in production can be ascribed to technical mishaps such as unavailability of drilling equipment or installation of new platforms, closure of wells due to less offtake because of the COVID-19 coupled with limitations and restriction in movement of onshore field operations.

l Natural gas production recorded a negative growth of (-)10.6 per cent in September, the 16th consecutive month of decline. This fall can be attributed to restricted off-take by major consumers and temporary closure of gas-wells in western off-shores.

l Refinery production, having high weightage in eight core, contracted by (-)9.5 per cent in September but registering an improvement over the previous month (-19.5 per cent in August). This is the seventh consecutive month in which there has been negative growth in this segment. The improvement on MoM levels can be ascribed to further unlocking of the economy, dropping of lockdown restrictions, and improvement in the capacity utilisation to 85 per cent in September (78 per cent in August). However, it continues to remain negative reflective of absence of revival in the transport segment.

l Output of steel sector grew by 0.9 per cent in September, its first positive growth after 6 consecutive months of negative growth. This corroborates the picture revealed by some of the steel companies which have seen good demand especially from the construction and auto sector.

l Cement production continues to record negative growth and has fallen by (-)3.5 per cent in September. However there has been a sharp improvement in this segment compared with the previous months during the fiscal. Robust increase in construction activity following returning back of labour to construction activities can be a key reason for this improvement.

l Output of fertilizers fell marginally by (-)0.3 per cent in September compared to 7.3 per cent growth in August and 5.5 per cent growth in the corresponding period last year.

l Electricity production rose to seven-month high of 3.7 per cent in September after six previous months of sustained negative growth. This improvement reflects higher industrial and business activity and a similar pattern is witnessed in coal as well.

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The sharp improvement in the core sector output is encouraging and collates well with the higher consumer spending seen in early October. A low base effect in the next month and the further unlocking of the economy is likely to push this growth into positive territory in the next month. The negative growth in the oil segment will further narrow in the coming months as the unlock process becomes more prevalent in the country. IIP growth for this month may be expected to be between -2-5 per cent.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

Sushant Hede, Associate Economist at CARE Ratings. Email: sushant.hede@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.

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Cement Prices Likely to Rise Rs. 10-15 per Bag from Mid-October

Input costs and steady demand may drive cement price increases

Published

2 days ago

October 14, 2026

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Cement manufacturers in India are likely to raise prices by Rs. 10-15 per bag from mid-October, as they seek to offset persistent increases in power and fuel costs. Emkay Research said its channel checks indicated a high probability of an increase from October 12, supported by the start of the busy construction season and favourable demand-supply conditions.

The sector had implemented similar rate adjustments of Rs. 10-15 per bag during the first quarter, but the increases were insufficient to cover higher operating costs. Prices also softened during July and August because of the monsoon, widening the gap between realisations and input expenses. Delayed plant expansion programmes have pushed clinker utilisation rates towards 79 per cent by FY28, helping to balance market fundamentals.

Emkay Research said steady volume offtake was supporting cement consumption, with non-trade demand driving activity across regional markets. Industry volumes are expected to grow by 7-8 per cent year on year during the first half of FY27, while demand momentum is projected to remain firm over the following 18 months. The outlook includes the busy construction season in the second half of FY27 and infrastructure activity linked to general elections in the first half of calendar year 2029.

The brokerage expects overall cement demand to record a compound annual growth rate of about 7 per cent between FY26 and FY28. However, elevated operating expenses are likely to continue weighing on profitability. Input costs have risen by Rs. 300-400 per t over the past six to seven months, with the full impact expected to become visible in second-quarter earnings and remain persistent through the second half of FY27.

Spot prices for petcoke and imported coal are approximately 20 per cent and 16 per cent above their second-quarter averages, at USD 175 per t and USD 150 per t, respectively. Packing costs have also increased, with polypropylene granule prices rising above Rs. 135 per kg. Emkay Research estimated that second-quarter earnings could decline by Rs. 200-250 per t sequentially because of higher fuel bills and negative operating leverage, and said the sector requires sustained price increases of about Rs. 10 per bag to offset cost inflation.

Concrete

Nuvoco Marks 10 Years, Targets 35 MMTPA Capacity by FY28

Nuvoco celebrates a decade of growth, targeting 35 MMTPA cement capacity by FY28.

Published

3 days ago

October 13, 2026

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Nuvoco Vistas Corporation Limited is celebrating a decade of operations under the theme ‘Dus Saal Bemisaal’, highlighting its expansion in India’s building materials sector. The company has grown from a single cement manufacturing facility into a diversified organisation operating across cement, ready-mix concrete (RMC) and modern building materials.

The company’s journey began in 2014 when its parent, Nirma Group, commissioned a 2 million metric tonnes per annum (MMTPA) greenfield cement plant at Nimbol, Rajasthan. A major milestone followed in October 2016 with the acquisition of Lafarge India, significantly expanding its manufacturing footprint.

Nuvoco strengthened its market presence through the acquisition of Emami Cement, now NU Vista Limited, in 2020, followed by its public listing in 2021. In April 2025, the company added Vadraj Cement to its portfolio, strengthening its presence in western India.

Nuvoco has an operating cement capacity of 27 MMTPA and 14 manufacturing units, including the Kutch and Sachana facilities in Gujarat, which are in advanced stages of completion. It also operates 58 ready-mix concrete plants across India and offers a range of modern building materials.

The company aims to increase its cement capacity to 35 MMTPA by FY2027-28, representing approximately 15-fold growth over the decade.

Reflecting on the milestone, Hiren Patel, Chairman, Nuvoco Vistas Corporation Limited, said, “From our beginnings at Nimbol to the organisation we are today, every milestone has added a new chapter to Nuvoco’s journey and strengthened our belief in building for the long term.”

The company continues to focus on capacity expansion, operational efficiency, innovation and sustainability while strengthening its position in India’s construction materials market.

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J&K Government Notifies City Gas Distribution Policy

Policy targets PNG and CNG expansion across all 20 districts

Published

3 days ago

October 13, 2026

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Jammu and Kashmir government has notified the City Gas Distribution (CGD) Policy, 2026, following its approval by the Council of Ministers headed by Chief Minister Omar Abdullah. The policy sets out a phased framework for expanding Piped Natural Gas (PNG) and Compressed Natural Gas (CNG) access for households, businesses, industries and the transport sector across the Union Territory.

CGD networks will be expanded in phases across all 20 districts, with the aim of bringing reliable natural gas closer to consumers and supporting a gradual shift from conventional fuels. The government said the policy is designed to improve energy access while creating an investor-friendly and time-bound environment for gas distribution projects.

The policy provides for single-window and time-bound clearances, streamlined procedures for setting up CNG stations and standardised norms for the Right of Way. These measures are intended to reduce procedural delays, simplify project implementation and facilitate investment in natural gas infrastructure.

It also prioritises gas connectivity for major industrial estates, including those in Kathua, Samba and Pulwama. Improved access to natural gas is expected to support industrial activity, enhance energy efficiency and help businesses manage fuel costs, while strengthening their competitiveness and encouraging investment in the clean-energy sector.

The policy is also expected to create opportunities for local employment, apprenticeships and skill development in the construction, operation and maintenance of gas distribution networks and related services. Abdullah described the measure as an important step towards cleaner growth, sustainable development and a modern energy ecosystem in Jammu and Kashmir, saying it would expand reliable energy access and support industry and investment.