New Delhi, March 11 : Cement makers’ volume growth is set to hit a decadal high of 13 per cent next fiscal, Crisil Ratings said on Thursday.
Accordingly, the growth trend will be backed by expected revival in demand from the infrastructure and urban housing sectors, and a generous low-base effect.
The agency in an analysis of 15 Crisil-rated cement companies cited that increased volume will counterweigh the impact of rising power and fuel costs on cash accruals, and will also keep the credit outlook of cement makers stable.
“Higher spends on infrastructure development would be in line with the 26 per cent increase in budgetary allocation for infrastructure in the Union Budget 2021-22. That, coupled with pent-up demand in urban housing, will drive volume growth,” said Nitesh Jain, Director, Crisil Ratings.
“Demand from hinterland — the saviour this fiscal — should sustain on the back of higher rural incomes.” According to Crisil, while volume growth will rebound, higher cost of sales would weigh on cement profitability next fiscal.
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