Cement Industry performance in FY19

The Indian cement industry is the second largest industry in the world after China. The major growth drivers of the cement industry are real estate and housing sector, with around 70 per cent demand coming from these sectors.

During FY19, the cement industry achieved the highest double-digit volume growth led by improved realisations in H2FY19. Also, capacity utilisations have improved which contributed to the growth journey. As of FY18, the total installed capacity was 465 million ton. During this period, the industry had approximately 70 per cent utilisation, giving better scope for growth without considering new addition and capex.

The industry has registered high demand from mainly South India where the companies like Ramco Cements and Sagar Cements have major exposure.

Looking at the price of cement, in February 2019, the cement companies have gone for a price hike by Rs. 12-16 per bag. The major price hike was taken in the Southern region and the lowest price hike was taken in Central and North region. The companies have also enjoyed a contraction in their production cost from H2FY19.

Going ahead, looking at the current price hikes and cost rationalisation measures paying off, coupled with government's initiatives like affordable housing and boost for infrastructure activities would drive the demand for cement.

We have shortlisted top 5 cement companies which have provided the highest return in FY19 along with their financial performance.


(Source: ACE Equity)

We have also shortlisted 5 cement companies which have provided the lowest return in FY19 along with their financial performance.


(Source: ACE Equity)