Cement volume to fall 12-14% this fiscal due to pandemic-induced disruption in demand
In the first quarter, volume witnessed the sharpest fall in two decades
The western region to be impacted the most; east and central region the least
Rural demand to rebound quickly, urbanand industrial demand to pick up gradually
Momentum in rural housing, higherMahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) spends, and higher agri-profitability driving rural demand
Weak sentiment persists in urban housing and real estate sectors, coupled with lower spends towards Pradhan MantriAwasYojana-Urban (PMAY-U)
Demand from civil infrastructure to be curtailed as tight fiscal position to result in moderation of government spend
Delays and deferment of industrial capex and commercial real estate projects to also impact cement volume this fiscal
Cement pricesto remain steady this fiscal
Operating margin to contract 150-200 bps as better realisationand soft petcoke prices would partly offset the impact of increase in freight charges and higher fixed costs
Credit profiles resilient on account of strong financials
Net debt/Ebitdato remain comfortable at 2.1 times this fiscal, though up from 1.5 times in the last
Most cement companies usually keep healthy liquidity; the policy is paying off in these challenging times
Analytica