Dalmia Cement (Bharat) Ltd is expecting a moderate growth in cement sales this year backed by government’s thrust on the infrastructure sector.

According to Ujjwal Batria, Chief Operating Officer, Dalmia Cement, demand is expected to pick up starting mid-October this year.

Focus on infra

“The cement market has been either flattish or even seen a small negative growth in Q1 and Q2. But looking at the way things are moving now, though I would not expect a high double-digit growth in Q3 and Q4, 5-6 per cent growth backed largely by infrastructure is what we are expecting. This will, however, depend on a number of factors,” Batria told BusinessLine .

Most of the negatives for the cement industry such as the monsoon and the festival season will be over by mid-October. The liquidity is expected to improve moving forward with the government releasing money in the market.

All these coupled with government’s focus on infrastructure will help drive demand, he said. Dalmia Cement currently has a total capacity of around 26 million tonnes per annum (mtpa) across its 12 manufacturing units.

The company is expecting to commission an additional 4-5 mtpa capacity by March 2020. The total investment on the expansion is close to ₹3,000 crore in phases.

Price outlook

The demand growth is likely to help firm up cement prices by 2-3 per cent moving forward.

“The price drop in the eastern markets has been steep due to slightly lower demand this year and also the monsoon. But this is not surprising; we have seen this kind of cycle in the past also and we have seen the cycles going up in Q3 and Q4. So, that is what we are hoping this year,” he said.

Published on October 12, 2019