Economy & Market
Cement despatches grows slowly
The year-on-year growth of cement despatches was moderate for many companies because of the sluggish pace of construction activity during the year as compared to last year owing to a slowdown in economy.
While ACC posted around 4 percent YoY growth in dispatches during September 2012, Ambuja Cement reported flat dispatch numbers. On an MoM basis, the dispatches increased around 5 percent for Ambuja Cements and 3 percent for ACC.
According to ICICIdirect, the total industry's volume may grow at around 7 percent YoY for 2012-13. During September 2012, prices of cement declined Rs 10-30 per bag MoM across regions owing to sluggishness in construction activities on the back of extended monsoons.
The broking firm said: "Though the capacity utilisation rate is expected to remain flattish in FY13E at 77 percent owing to higher effective capacity additions, utilisation rates may improve gradually to around 79 percent by FY14E as incremental demand may surpass effective capacity additions during the year".
On the pricing front, cement prices may see short-term pressure from seasonal weakness and CCI order. However, an improvement in utilisation rates coupled with higher input costs would keep cement prices at higher levels over a long term, it said.