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Cement sector growth estimated at 3% in FY’14

December 5: The Indian cement industry is expected to notch up a modest growth of around 3% in 2013-14, but may see an uptick depending on the impact of the state election results on the market, an analysts’ report has said.

“Growth in demand for cement is expected to remain sluggish, impacted by the continued weakness in the housing and infrastructure verticals. We estimate a growth of 1.3% year-on-year (y-o-y) in 2QFY’14 and around 3% for FY’14,” the ‘India Strategy’ report released recently by Motilal Oswal said.

“Capacity utilisation is expected to decline y-o-y at 66% - the lowest levels in the last 13 years. Our interactions with dealers across regions highlight limited visibility in near-term demand recovery,” the report added.

However, the analysts said the industry is “hopeful” of an election impact to play out in favour of demand uptick in the second half (2H) of FY14, “resulting in 5% volume growth”.

According to data available with ICMW, cement production recorded a y-o-y growth of 2.7% during H1 of FY’14.