Cement demand growth to continue in Q4

New Delhi: Cement demand growth is expected to continue in Q4FY21, said India Ratings and Research (Ind-Ra). Accordingly, the agency pointed out the aggregate sale volumes of listed cement companies grew nine per cent YoY in Q3FY21. This trend, Ind-Ra cited was led by the continued momentum in the rural segment and some traction in infrastructure.

"The strong performance in 3QFY21 restricted the volume decline at six per cent YoY in 9MFY21. Given the low covid-impacted March 2020 base, Ind-Ra expects continued volume growth in 4QFY21, resulting in an overall decline of just around two per cent YoY for FY21." "A strong rural demand and recovery in the infrastructure segment have been the key drivers of the strong recovery witnessed by the sector." As per the agency, eastern region is likely to clock growth in FY21 while central and north have also witnessed a smooth recovery.

"The recovery in the southern region has been slower, given its higher exposure to institutional sales and a prolonged monsoon, though exceptions such as NCL Industries Limited (NCL) and Deccan Cements Limited witnessed double-digit growth in 9MFY21." "Notwithstanding some recovery 3QFY21 onwards, the Western region would decline the sharpest in FY21, given the highest incidence of Covid-19 within the country."