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Cement industry may see demand uptick in H2

30 Oct 2013

October 30: The Indian cement industry, which has been passing through slack market conditions in recent quarters, may expect to see a demand uptick in the second half (H2) of 2013-14 (FY14), according to an analysts' report.

"Cement demand growth is expected to remain sluggish in the second quarter (Q2) of FY'14, impacted by continued weakness in housing and infrastructure vertical and seasonal impact of monsoon. We estimate growth of 1.3% year-on-year (y-o-y)… in 2QFY14 and 3% for FY14," the India Strategy report by Motilal Oswal said.

It further said that capacity utilisation is expected to decline y-o-y (-3pp YoY) at 66% - lowest levels in last 13 years.

However, the dealers are hopeful of a positive "election impact" which may play out in favour of demand uptick in 2HFY14, resulting in a 5% volume growth, the report said.