Cement volumes growth is expected to moderate to 4-5 per cent to 445-450 million MT in FY2025, stated ICRA while revising its projection from an earlier forecast of 7-8 per cent released in July 2024. This, it added, is on account of slower-than-expected ramp-up in construction activity across the housing and infrastructure sectors, post the General Elections.
The All-India cement volumes witnessed a muted rise of 2 per cent YoY to 212 million MT in H1FY25 on account of the slowdown in construction activity in Q1FY25 during the elections, followed by the ample monsoon rainfall in Q2FY25. Per ICRA, cement demand for the rural housing segment will be aided by an expected boost in the rural consumption in H2FY25 on the back of likely improvement in farm cash flows, backed by healthy monsoons, an upbeat kharif output and elevated replenishment levels of reservoirs supporting the rabi crop sowings.
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Additionally, the sustained healthy demand for urban housing should support the pick-up in cement volumes from the housing segment. Further, ICRA stated that the infrastructure segment is likely to witness greater traction in H2FY25, supported by an increase in Government spending on infrastructure projects. The Government of India’s (GoI’s) gross capex spend in H1 remained subdued at Rs 4.0 trillion (YoY contraction of 19 per cent), against the revised Budget Estimate of Rs 11.1 trillion for the full year FY2025. The substantial headroom for the GoI’s capital spending in H2 to meet the FY25 revised Budget Estimate, is likely to provide a fillip to construction activity and aid in supporting the allied input sectors like cement, stated the report.
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The cement prices remained under pressure,
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