Indian cement sector grows on demand from rural housing
During the first six months of current financial year cement production has seen a 7.4 per cent growth. Within the eight core industries, that have a combined weight of 37.9 per cent in the Index of Industrial Production (IIP), cement industry has recorded the second fastest production growth.
During the first six months of 2012-13, coal at 8.3 per cent emerged as the fastest growing sector, followed by cement.
Cement production, after remaining slightly soft in August affected by monsoon, recorded a 13.4 per cent Y-o-Y growth during the month of September 2012. Bhupali Gursale, economist at Angel Broking, says that cement has also been supporting the overall GDP growth.
Cement demand has remained strong largely driven by rural housing segment feels Ravi Sodah, cement analyst at Elara Capital. Sanjeev Kumar Singh analyst at Centrum also sees the rural retail housing demand to have been a major contributor to cement demand. Analysts also feel there is some support from urban retail demand as well.
Bankers have also said that there is an increase in new building activity in semi-urban and rural housing. The activity level at contractors is more now than what was seen three months ago. This is one indicator for the rise in cement demand.