Other Sectors

Cement cracks

Covid-19 culls demand, crude cushions blow to profit

 

Cement demand to contract as Covid-19 hurts construction

 

Covid-19 has cast a long shadow over a much-anticipated mild recovery in Indian economy in fiscal 2021. Along with external factors such as weak global demand, supply disruptions, and global financial shocks, the economy is grappling with lockdown, factory shutdowns, reduced discretionary spending, and delayed capex cycle.

 

All this is expected to affect construction, and thereby cement demand.

 

Given the uncertainty in the current environment, we have based our analysis on two possible scenarios based on spread and containment period of the pandemic.

 

  • Our baseline view assumes lockdown/ other social distancing measures to continue till April end and construction activity to resume in mid-May
  • Our pessimistic view assumes extended vulnerability to the virus with construction activity beginning only in the second half of this fiscal