Cement sector aims double digit growth
The cement sector in India is mainly driven by increased demand from sectors such as roads, railways and housing, the cement industry in India is expecting double-digit growth in the current financial year after a gap of nearly eight years.
In the first half of FY19, the industry has seen a growth of 13 per cent. The industry did go through very tough times from 2010-2016, growing at less than 5 per cent. Looking at 2017-18, the growth rate was 9 per cent. The last time cement sector saw a double-digit growth was in 2010. The industry grappled with over capacity since all players invested in building capacities after a good run in 2006-2010. There were positive signs of demand, especially from roads and railways segments. The housing segment was also picking up as a result of the government’s Affordable Housing for All scheme.
We are seeing traction and momentum is building up, we should definitely see double-digit growth this year if nothing untoward happens, said the management of Ultratech Cements.
Cheaper imports hurt
Cheaper cement imports from Pakistan were hurting the domestic industry. There’s been no customs duty on cement imports from Pakistan since 2007, making it competitive in comparison to the Indian product, especially in the states bordering Pakistan. The Cement Manufacturers Association said Pakistani cement was almost 10-15 per cent cheaper than Indian cement. Cement imports from Pakistan between December 2017 to March 2018 grew 24 per cent year-on-year to 4.55 lakh tonnes.
The industry had proposed that the GST rate of 28 per cent applicable on cement should be reduced. Industry experts recognise that this sector is a big contributor to government revenue, hence if the GST is lowered, the benefit will be passed on to end-users. The industry, however, has not proposed any particular slab for their sector.
Meanwhile on Monday, the stock of major cement producing companies including Ultratech cement closed at Rs. 3776.40 per share, up by 0.16 per cent, ACC cement closed at Rs. 1458.80 per share, up by 0.010 per cent, Shree Cement closed at Rs. 1549 per share, down by 2.60 per cent, India cements closed at Rs. 85.80 per share, down by 1.61 per cent.