Good monsoon and economic recovery are key triggers for
cement industry. According to office of economic advisory (under ministry of
commerce and industry), the domestic production has increased by 11.4% in FY16
Q4. (Kindy note the production fell by 0.4% in FY 2015.) Hence the growth in
cement sector can be taken as a stamp on the economic recovery – resulting in
overall growth across sectors.
- · There are 32 major cement producers in India
- · In Q4, the over all cement production was down by 4%, with 14% fall in the western region followed by 7% fall in eastern region, 4% in northern region and 2% in central region. South remained falt.
- · Net profit of 20 major North indian cement companies (accounting for 84% profit) fell by 11% on the back of 4% growth.
- · South Indian cement companies (12 listed entities) posted 4% droup in net profit against 6% growth in sales
- · Ramco Cements net profit jumped 119% on a 2% gain in revenue.
Likely improvement in demand in infra and housing projects,
backed by government and favourable monsoon auger well for cement companies.
The construction activity enters a peak phase from November till May every
year. Let’s hope for the best
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