Cement volume growth hits 9-year high in 2018-19
Given that the volume growth has already bridged the gap between demand and supply, the volume growth is expected to moderate during the current fiscal, say analysts.
"The industry is in its upcycle with double-digit volume growth for the full year, the first time since FY10," said cement major UltraTech in a recent presentation to investors. The 2018-19 annual volumes of UltraTech have jumped 21 per cent, higher than the industry average.
However, UltraTech's main competitor in capacity rankings - Holcim-Lafarge controlled ACC and Ambuja Cements, however, failed to catch up with the industry volume growth pace. For the March 2019 quarter, Ambuja and ACC reported a 2.4 per cent and 5 per cent, while they have reported six per cent and eight per cent growth for the full fiscal.
Industry's volume growth was lead by Southern region with Andhra Pradesh and Telangana leading the pack.
Cement volumes to grow at 7 to 8 per cent during the current financial year, predicts Sabyasachi Majumdar, group head, corporate ratings at ICRA. "We believe rural housing and most of it coming from the Pradhan Mantri Grameen Vikas Yojana contributed to this growth. It looks unlikely that the double-digit trend will continue in FY20."