Government`s sustained infrastructure focus likely to support cement demand in India: Ind-Ra
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Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has showed that India’s cement demand is likely to be supported by the government’s sustained focus on capex towards infrastructure projects in the budget of FY25, albeit at a moderated pace of growth of 5%-7% YoY (FY24: 8%-9%) as expected by the agency.
The rating agency noted that the capex spending at Rs 11.1 trillion in the Union Budget FY25 is same as was in the interim budget FY25. However, it said that the announcements made in this budget towards infrastructure development in Bihar and Andhra Pradesh would aid the cement demand growth in these regions over the near term.
It said the infrastructure development plans announced in the budget should lead to an increase in cement demand growth in eastern India, which has remained subdued in the recent past, while south-based cement companies, particularly ones with exposure to Andhra Pradesh, could see demand traction over the next few years. According to Ind-Ra, the focus on agriculture and rural development bodes well for the cement demand, given 37%-38% of cement demand is derived from rural housing.
