Economy & Market

Demand uptrend persists, amid price pressures

Published

8 years ago

April 30, 2018

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Cement demand that has started picking up in the third quarter (October-December 2017) of fiscal 2018 (FY18) continued its growth streak in the fourth quarter of the fiscal, according to analysts. However, cement realisations failed to post commensurate rise, and prices, which should have seen an uptrend in the last quarter of the year, have remained subdued.Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings, says, "A demand pick-up in the recent months, October 2017 to January 2018 by 13.4 per cent, is backed by low cost housing in the eastern markets, Andhra Pradesh and Telangana along with the infrastructure demand from the eastern, southern and western markets."
Discussing the latest demand trends, CLSA’s Vivek Maheshwari and his team says, "The industry has seen a pick-up in volume growth, also reflected in 11 per cent volume growth expected for our coverage in 4QFY18 (January-March 2018 quarter). While a low base helped (these volumes), the two-year Compounded Annual Growth Rate (CAGR) should still be at a respectable ~8%." Besides, cement realisations have not seen any quarter-on-quarter (QoQ) uptick despite favourable seasonality.
The demand environment continued to remain favourable in March 2018, said Binod Modi – Senior Research Analyst, Reliance Securities, in a recent report, adding, however, the pricing trend remained subdued marked by sharp month-on-month (MoM) contraction during the month. Volume push owing to year-end month, and fair chances of price hike from April 2018 also aided volume growth.
"Demand growth was aided by both trade and non-trade segments and most dealers expect the demand momentum to remain benign till the onset of monsoon, while the prices are expected to bounce back from first or second week of April across the regions barring Central," said Modi.
"A pick-up in the affordable and rural housing segments and infrastructure – primarily road and irrigation projects – is likely to continue the demand growth momentum of around 5 per cent in FY2019," says Majumdar.
Budget FY2019 has provided higher rural credit target, increased MSP, and allocation for rural, agricultural and allied sectors, and stressed on continued focus on the PMAY and infrastructure investments, all positive for cement demand growth. Price falls
There was a disappointment on the price front for the cement companies in the Q4FY18. March quarter is traditionally the busiest quarter for construction, and hence cement prices usually firm up sequentially, but not this time.
All-India average cement price corrected by about 3 per cent MoM to ~Rs 286-291/bag mainly due to sharp correction in Western and Southern realisation, which corrected by ~6 per cent and 5 per cent MoM, respectively in March, while average prices in Northern, Central and Eastern regions corrected by ~1 per cent MoM each, according to Reliance Securities. Besides, all-India average price declined by 1 per cent YoY (Rs 3-5/bag) and 0.3 per cent QoQ in 4QFY18.
Average price in Southern region corrected sharply by 5 per cent QoQ, while it corrected by 1-1.5 per cent QoQ in Western and Northern region during 4QFY18. However, Eastern and Central regions witnessed average price improvement of ~3 per cent and ~4 per cent QoQ, respectively during 4QFY18.
CLSA said that their channel checks had indicated that "efforts are underway to raise prices by 5-20 per cent in South India and Maharashtra," the regions which saw the highest pressures on EBITDA, follow the sharp cuts in March. However, the channel is still apprehensive on sustainability of such hikes.
"Overall, while cost inflation remains a concern, we believe that price hikes are imminent across regions and unit margins should expand in FY19," says Maheshwari.
Though government seems to be vigilant about any price hike by the cement companies for last couple of months, Modi of Reliance Securities expects "prices to witness an upward movement in coming months due to rising cost pressures
and sustained demand growth leading to higher utilisation."Cost pressures
"Overall earnings before interest, tax, depreciation and amortisation (EBITDA or operating profit) for our coverage should rise by a modest 7 per cent year-on-year (YoY) although net earnings will likely decline," Maheshwari says in the report. This is mainly due to high costs particularly those of pet coke, imported coal and diesel, however, rising volumes are expected to come to manufacturers’ rescue during the quarter to an extent. Due to lack of price hikes during the quarter EBITDA margins are expected to decline by 7-8 per cent YoY and QoQ to a 13-quarter low, for CLSA’s universe of cement stocks, Maheshwari said in the report.
Majumdar also predicts that expectation of higher pet coke, coal and diesel prices are likely to put pressure on the profitability margins and debt metrics of the cement companies in the coming quarters.
"Lumpy capacity additions in the recent past have led to an increase in debt levels and some deterioration in credit metrics, although they still remain at comfortable levels for most of the larger players. Further, higher power and fuel (increase in coal and pet coke prices) and freight costs (increase in diesel prices) in FY2018 and in the coming quarters of FY2019 is likely to continue to put pressure on the profitability margins and debt metrics of the cement companies. Hence, the ability of the industry players to secure increases in cement prices remains critical from the profitability perspective," Majumdar reiterated.
Given all these scenarios, ICRA expects that the capacity overhang and the moderate demand growth to continue to keep the industry’s capacity utilisation level close to 65 per cent over the medium-term (3-5 years).

Concrete

Fornnax Wins AIRIA’s Special Export Award for Rubber Machinery in 2025-26

Published

2 days ago

October 19, 2026

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Fornnax Technology Pvt. Ltd. has been honoured with the Special Export Award – Rubber Machinery for 2025–26 by the All-India Rubber Industries Association (AIRIA), in recognition of its highest exports of tyre recycling plants to the European region.

With more than a decade of experience in India’s tyre recycling industry, Fornnax has contributed to the development of advanced recycling technologies and infrastructure. The company currently holds a 90% market share in India’s domestic tyre recycling sector, while exports account for 30% of its business, spanning markets such as Europe, Australia and the GCC.

The award marks another milestone for Fornnax, whose tyre recycling lines and advanced shredding technologies are supporting the growth of the circular economy in India and international markets.

Commenting on the recognition, Mr. Jignesh Kundaria, Founder and Director of Fornnax, said:

“This honour from AIRIA is a reflection of an incredible journey we have undertaken over the years. When we started Fornnax, there was no established recycling industry in India to follow. We chose to build for the future instead. Today, when you see India’s tyre recycling sector, it has already transformed into a dynamic, high-growth industry and we are extremely proud to have played our part in building it.”

Unlike standalone equipment suppliers, Fornnax focuses on developing complete, high-capacity recycling infrastructure. Its integrated systems combine multiple stages of shredding and size reduction to enable efficient, continuous operations. This system-level engineering approach helps recycling operators improve throughput, equipment reliability and operational consistency.

The recognition reinforces Fornnax’s commitment to developing engineering technologies that contribute to a more efficient and circular recycling ecosystem.

Looking ahead, the company aims to expand its international presence while continuing to develop advanced shredding and recycling solutions to address the growing volumes and evolving requirements of the global recycling industry.

For more information, visit: www.fornnax.com

Concrete

Wonder Cement appoints Mahesh Singh as VP Corporate Brand Communication

Published

2 weeks ago

October 9, 2026

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Singh brings 20+ years of brand and marketing experience, and will lead integrated corporate brand communication initiatives at Wonder Cement

New Delhi

Wonder Cement, a leading cement manufacturer, has appointed Mahesh Singh as Vice President – Corporate Brand Communication. In his new role, he will oversee corporate brand strategy and communication, including digital and performance marketing, public relations, trade, events, exhibitions, sports and experiential marketing.

Singh brings over two decades of experience across marketing and communications, with roles spanning the automotive industry, agencies and entrepreneurship. He spent more than a decade with Honda Motorcycle & Scooter India, working across integrated communication, media, digital, retail and consumer engagement. His stint also included helping build the company’s digital marketing capabilities.

He moved to dentsu X India as Vice President – Strategy & Planning, working across categories such as automotive, auto components, electric vehicles, FMCG, consumer electronics, BFSI, apparel and brand consulting. His responsibilities included media and marketing strategy, product launches, content, performance marketing and consumer activations.

Singh subsequently took an entrepreneurial route with Radiant Brands before joining Shriram Ltd (SPR Autotech) as Head – Marketing & Communications. There, his remit included brand and corporate strategy, communications, PR and ORM, retail identity, loyalty programmes and events.

At Wonder Cement, Singh will be responsible for bringing together the company’s corporate brand communication initiatives across digital, performance marketing, PR, trade, sports and experiential platforms. The role will focus on creating an integrated approach to communication across consumers, trade partners and other key stakeholders.

The appointment brings to Wonder Cement a marketer whose career has spanned the brand, agency and entrepreneurial sides of the communications ecosystem.

Wonder Cement, part of the RK Group, is a cement manufacturer with roots in Rajasthan and a focus on quality, trust and transparency. The company has grown to six manufacturing plants, and a cement capacity of 21.5 MTPA. With more than 2,000 employees and a network of over 5,000 dealers, its operations span manufacturing, distribution and customer engagement, with a focus on consistent product quality and efficient execution.

Concrete

JSW Cement commissions additional 1 MTPA grinding unit at Nagaur

Published

2 weeks ago

October 8, 2026

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With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA,
Mumbai

JSW Cement, one of India’s leading green cement producers and part of the diversified JSW Group, today announced the successful commissioning of an additional 1.00 MTPA cement grinding unit at Nagaur, Rajasthan. The commissioning marks another significant milestone in the Company’s growth strategy.

With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA, while its total clinker manufacturing capacity, including clinker capacity at its joint venture, JSW Cement FZC, stands at 9.74 MTPA.

JSW Cement had commenced operations in North India in March 2026 with the Nagaur Integrated Plant, comprising a 3.30 MTPA clinkerisation unit and 2.50 MTPA cement grinding unit. With the commissioning of the additional 1.00 MTPA cement grinding unit, the plant’s total cement grinding capacity has increased to 3.50 MTPA, enhancing the company’s ability to cater to the growing cement demand across Rajasthan, Haryana, Punjab and the National Capital Region (NCR). The expansion has been funded through a strategic mix of equity and long-term debt.

During the quarter ended 30th September 2026, JSW Cement has also commissioned the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) at the Nagaur Integrated Plant.

Nilesh Narwekar, CEO, JSW Cement, said: “The commissioning of additional 1.00 MTPA grinding capacity at Nagaur is a key strategic priority for us and will accelerate JSW Cement’s expansion into North India. We look forward to servicing the growing needs of the region and contributing to the economic growth of Rajasthan, Haryana, Punjab and the NCR area. I am delighted to share that the company has commissioned this grinding unit within the expected timeline, showcasing our project execution capabilities. Further, the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) are expected to substantially reduce our production costs going forward.”