Economy & Market
Cement Cos may post poor earnings - Reports
Firm raw material prices and subdued cement prices owing to weak demand may play spoilsports on the financials of the cement companies in the second quarter of 2011-12. While the monsoon months are not the best for cement demand in India, stagnating infrastructure projects and sluggish demand in the real estate sector have hurt cement companies. Going by the demand scenario in the real estate market, cement demand may not revive significantly to improve utilisation. Analysts expect the sector to remain volatile this year and the next, as the first and second quarters would remain subdued and the third and fourth would see good demand. But some analysts expect revival of demand going forward. According to channel checks by Deutsche Bank's global markets research team, many wholesalers or retailers and marketing personnel are seeing significant new inquiries for cement deliveries in the second half of 2011-12. The Bank estimates at least 8 per cent growth in the second half of 2011-12, followed by a 9 per cent (estimated) CAGR in 2012-14.