Cement Production May Grow At 6-7% In FY 19

Cement production is expected to grow at 6-7 % in the current fiscal year, driven by pick-up in affordable and rural housing segments and infrastructure. However, rising costs are likely to put pressure on the operating profitability of cement firms in the coming quarters, Icra said in its report, adding the manufacturers’ ability to secure price increases remains the key. Production remained in the range of 27.5- 28.6 million tonne (mt) during the April-June period, clocking the highest at 28.6 mt in June. It declined in July by 9.3 % on a month-onmonth (MoM) basis owing to the monsoons, when cement consumption is on the lower side. However, it remained high by 10.8 % on a YoY basis, at close to 26 mt. 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, according to the report.