Comments
Even as the economy is on a recovery path, India Cements is cautiously optimistic about the demand outlook for the current fiscal, said N Srinivasan, Vice-Chairman and Managing Director of the company.
“The cement industry has seen the resurgence of demand. There are signs of the Covid situation easing and demand is also picking up. At the same time, one has to be cautiously optimistic about the immediate future given the predictions of a possible third wave of the pandemic,” he said while addressing the company’s 75th annual general meeting through a video conference on Wednesday.
Growth prospects
He pointed out that cement consumption would go up due to increased spend on infrastructure projects by the Central government.
The latest macro numbers indicate that the economy is on recovery mode with improving performance across various high frequency industrial and service sector indicators.
Also see: Tamil Nadu’s energy dept plans a solar park in every district
The recovery is said to have deepened with further easing of Covid-related curbs and inoculation drive. The RBI and global agencies have projected a rebound with a strong GDP growth of 9.5 per cent in 2021- 22. With reports of good rainfall for a third consecutive year, the farm sector and rural economy are expected to do better, creating more rural demand. With re-location of workplaces and increasing work-from-home and anywhere concept, there is increased house building and construction activity in urban and semi-urban centres, Srinivasan said.
In the southern region, there are positive signs. The new government in Tamil Nadu is giving a push to housing and infrastructure development, while the Andhra Pradesh and Telangana governments are also implementing irrigation, road building, and other infrastructure projects and new housing schemes. “All these developments give room for cautious optimism for cement demand in the coming months,” he added.
Limited Covid impact
Despite the impact of the second wave, the company managed to post an impressive performance in June 2021 quarter as capacity utilisation went up to 50 per cent when compared to 35 per cent a year ago. It is expected to improve further. “Decision on capacity expansion or de-bottlenecking measures will be taken at the appropriate time, which is not far away,” said Srinivasan.
Indian Cement repaid debt worth ₹551 crore in FY21 and hopes to repeat the same this year if there is no third wave.
“Though the company faced cost pressures, it managed to bring down fixed costs. Not a single employee was sacked during the pandemic phase and now all employees have been vaccinated,” he added.
Though this year is the Platinum Jubilee Year for the company, it refrained from celebrating it due to the prevailing Covid situation.
N Srinivasan was re-appointed as the Vice-Chairman and Managing Director of India Cements for a period of five years with effect from May 26, 2021.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.