After a period of slowdown, demand for cement is expected to pick up mainly because of the increase in
Government spends in the infrastructure sector, a survey by ICICI Securities has found.
The demand for the key construction material has improved in states like Punjab, Haryana, Uttar Pradesh, Bihar and Maharashtra, while its prices have increased by Rs 30-40 per bag in the past two months, the leading brokerage said in a statement here today.
Others like Rajasthan, Gujarat, West Bengal and Karnataka are showing initial signs of demand improvement, while requirement in Andhra Pradesh and Tamil Nadu is likely to remain weak, it said.
"We continue to maintain our positive stance on the sector and expect demand to pick up on the back of healthy rural housing demand due to a good monsoon, gradual pick up in Government infrastructure spends and low base of the past year," the financial services firm said.
In November, cement despatches grew by around 3-4 per cent year-on-year while they declined by 7-8 per cent on month -on-month basis to around 18.5 MT, impacted by sand mining ban in Rajasthan (partially lifted on Nov 26), cyclones in Andhra Pradesh and Odisha, Assembly elections in Rajasthan, Madhya Pradesh, Chhattisgarh and Delhi and festive season, it said.
The year-to-date demand growth in FY14 is likely to be at 3-4 per cent YoY led by east and and central regions, where expansion is expected to be 6-8 per cent. North region has likely grown by 2-3 per cent, while west and south are expected to have broadly flat demand.
Cement prices have been hiked by Rs 10-15 a bag (50kg) in north, central and west regions effective December 2, while they were broadly flat in south and east. On an average pan- India prices increased by 1-2 per cent MoM, while remained flat YoY to Rs 284 a bag in November.
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