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September 01, 2019

Sector Report: Cement

This report is available to users in India for ₹40,000 + applicable taxes


Table of Contents


  • Summary
  • Segment-Wise Demand
  • Region-Wise Demand
  • Capacity Additions
  • Blending
  • Operating Rates
  • Long Term Outlook
  • Costs & profitability
  • State-wise Analysis




Midcycle slowdown for cement to 4.5-5.5% in FY20, margins to expand (touch six year high)


Weak H1 to weigh on demand growth in fiscal 20


Cement demand is expected to grow at witness a slowdown to 4.5-5.5% in fiscal20 after witnessing robust growth of 12% and 9% registered in the past two fiscals. Demand growth will bear the brunt of weak government spending in first half which contributes to nearly 35-40% of cement demand and liquidity crunch impacting real estate market which consumes 5-8% of cement demand. Other external factors such as election-related labour shortage in the first quarter, sand and water availability in key states further accentuated the issue in H1 of current fiscal. Growth in the second half will be better led by gradual pick up in govts fund release for infrastructure and affordable housing projects apart from pick-up in rural housing demand.


Western and Central region will drive demand in the current fiscal while southern and eastern region witnesses a slowdown.


However, deman growth to inch up to 6-7% CAGR over a five-year period led by pick up in affordable housing, rise in government spending on infrastructure activities, and healthy rural housing demand. At regional level eastern states followed by central and north regions would see healthier growth with continued state governments focus on infrastructure development.