ICRA revises cement growth outlook for FY22
Cement

ICRA revises cement growth outlook for FY22

ICRA has revised its cement volumetric growth outlook from 15% to 10-12% for FY22 as the second wave of Covid-19 has impacted domestic cement production in the first quarter of the financial year.

In April, cement production was 11% month-on-month (m-o-m) and decreased to 18% in May. It is not like the previous year when most urban areas got infected.

Notwithstanding the start of the monsoon, the expected pent-up demand to drive the volumes is the beginning of Q2 FY22.

The ICRA report said the production volumes of cement firms could take a hit this fiscal year; it is expected that the credit profile would remain constant and run by healthy cash generation and strong liquidity.

However, the increasing input prices could result in a decline in operating margins by nearly 300 bps.

Shree Cement, India Cement, UltraTech Cement, Bharathi Cement, Dalmia Cement, and Ambuja Cement are big cement companies in the domestic market.

About the road logistic sector, ICRA said due to the second wave, muted business performance over Q1 FY22 is likely to hold annual growth at 6-9%, compared to the last estimate of 10-12% for FY22.

The rating company is expecting the aggregate operating profit margins of logistic companies samples to be between 9-9.5% in FY22, against 9.9% in FY21.

ICRA said that the logistic capability of companies to increase freight rates would be essential to sustaining profitability in the near term.

Growth across the medium term would continue to run by demand from parts such as pharmaceuticals, industrial goods, e-commerce, FMCG, retail, and chemicals, linked with the paradigm shift of the industry towards organised logistics players, after the GST and E-way bill implementations.

Image Source


Also read: Cement industry to witness improved demand from July 2021

Also read: Cement prices in India improve, maximum hike in southern India

ICRA has revised its cement volumetric growth outlook from 15% to 10-12% for FY22 as the second wave of Covid-19 has impacted domestic cement production in the first quarter of the financial year. In April, cement production was 11% month-on-month (m-o-m) and decreased to 18% in May. It is not like the previous year when most urban areas got infected. Notwithstanding the start of the monsoon, the expected pent-up demand to drive the volumes is the beginning of Q2 FY22. The ICRA report said the production volumes of cement firms could take a hit this fiscal year; it is expected that the credit profile would remain constant and run by healthy cash generation and strong liquidity. However, the increasing input prices could result in a decline in operating margins by nearly 300 bps. Shree Cement, India Cement, UltraTech Cement, Bharathi Cement, Dalmia Cement, and Ambuja Cement are big cement companies in the domestic market. About the road logistic sector, ICRA said due to the second wave, muted business performance over Q1 FY22 is likely to hold annual growth at 6-9%, compared to the last estimate of 10-12% for FY22. The rating company is expecting the aggregate operating profit margins of logistic companies samples to be between 9-9.5% in FY22, against 9.9% in FY21. ICRA said that the logistic capability of companies to increase freight rates would be essential to sustaining profitability in the near term. Growth across the medium term would continue to run by demand from parts such as pharmaceuticals, industrial goods, e-commerce, FMCG, retail, and chemicals, linked with the paradigm shift of the industry towards organised logistics players, after the GST and E-way bill implementations. Image Source Also read: Cement industry to witness improved demand from July 2021 Also read: Cement prices in India improve, maximum hike in southern India

Next Story
Infrastructure Energy

REC Transfers HVDC Project to Power Grid

REC Limited has successfully handed over the Special Purpose Vehicle (SPV) for a High-Voltage Direct Current (HVDC) transmission project to Power Grid Corporation of India Limited (PGCIL). This strategic move aligns with the nation's objectives to strengthen its power transmission network. Key Highlights: Project Overview: The HVDC project, under the inter-state transmission system (ISTS) initiative, is a critical component of India's push toward robust and efficient electricity transmission. It aims to handle bulk power transfer across long distances while ensuring minimal losses. Role of RE..

Next Story
Infrastructure Transport

NF Railway Collaborates with IIT Guwahati

The Northeast Frontier (NF) Railway has signed strategic Memorandums of Understanding (MoUs) with IIT Guwahati to foster technological advancements and improve railway operations in the region. This partnership focuses on innovative solutions to enhance safety, efficiency, and sustainability in rail infrastructure. Key Highlights: Purpose of MoUs: The collaboration aims to leverage IIT Guwahati's expertise in technology and research for implementing cutting-edge solutions across railway operations. Key areas of focus include: Automation and digitization in maintenance. Sustainability initiati..

Next Story
Infrastructure Transport

Danapur Division Modernization Plans Revealed

The Railway Board has unveiled ambitious plans for the expansion and modernization of the Danapur Division, a critical hub under the East Central Railway. The initiative focuses on infrastructure development, enhanced passenger amenities, and operational efficiency. Key Highlights: Scope of Modernization: The Railway Board's blueprint emphasizes: Upgrading existing infrastructure to accommodate more passenger and freight traffic. Improving station facilities, such as platforms, waiting areas, and connectivity. Introducing advanced signal systems for safer and smoother operations. Freig..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000