ICRA Forecasts Slower Cement Growth in FY25

27 Nov 2024 , 12:32 PM

According to a recent ICRA analysis, the cement sector in India is preparing for slower growth in FY2025, with volumes predicted to increase by 4-5% YoY to reach 445-450 million metric tonnes (MT).

This represents a significant change from the July 2024 growth forecast of 7-8%. After the general elections, construction activity in the housing and infrastructure sectors recovered more slowly than anticipated, which is reflected in the revision.

In the first half of FY2025 (H1 FY2025), cement volumes rose by just 2% YoY to 212 million MT, demonstrating the moderate growth trend. This delay was largely caused by strong monsoon rains in Q2 FY2025 and disturbances linked to the election in Q1 FY2025.

The industry is hopeful for a better second half (H2 FY2025), though, since infrastructure spending is expected to increase and demand for homes in both rural and urban areas is expected to rise.

According to Assistant Vice President and Sector Head, Corporate Ratings, Tushar Bharambe, who talked to ET said,  “the operating performance of the cement companies will improve from Q3 FY2025 onwards, supported by the likely price hikes, uptick in cement volumes aided by increased Government spending on infrastructure projects, pick-up in construction activities, and stable input cost pressures – primarily pertaining to power and fuel.”

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