Steel and cement industries continue to face a muted growth rate as demand from key consumption sectors such as real estate and infrastructure is yet to gather momentum.

Officials from the real estate industry said the sentiment has improved since the new Government took charge, but it hasn’t yet translated into sales.

While official numbers for April-September steel consumption are not out yet, a senior official at Joint Plant Committee said that growth has slowed down to a nine-year low of 0.5 per cent at around 36.7 million tonne (mt) against the same period last fiscal. On the other hand, the cement industry in the South expecting 5-6 per cent lower volume growth, while price cuts are expected to boost sales for companies based in the North, industry observers said. “Medium-term business sentiment remains strong, but expected revival of investment cycle now appears likely in 2015-16 fiscal,” said JSW Steel. JSW’s total sales during the April-September 2014-15 grew 5 per cent to 5.94 mt after a 2 per cent drop in sales during the second quarter to 3.07 mt.

Tata Steel too saw slower sales growth during the first half of fiscal 2014-15. The company sold 4.21 mt of steel, a growth of 4 per cent while in the second quarter it sold 2.11 mt, which was also a growth of 4 per cent. Numbers of Steel Authority of India Ltd were not available.

A little stronger

In cement industry, Aditya Birla Group’s UltraTech Cement, with a focus on North and North-West clocked impressive sales growth of 13.7 per cent during the first half at 22.05 mt during the first half of fiscal 2014-15. However, this included sales from newly acquired Gujarat units of Jaypee Group and was backed by price cuts.

“UltraTech’s realisations in second quarter were 5-6 per cent lower as compared to the first quarter but more or less flat as compared to the same quarter last year,” said a cement industry analyst.

“Going forward, the Government’s focus on housing and infrastructure is expected to improve cement consumption and we should be able to close the year with a 6-7 per cent growth in volumes,” the analyst added.

According to Mudassir Zaidi, National Director, Residential Agency, Knight Frank India, the real estate sector has seen lesser sales this year. “This is because the investors who put in money in real estate market for short-term gains have vanished because of the dull,” he said.

Developers say the revival will take some time. “Although the sentiment is strong , it will take the next 2-3 quarters to see a revival,” said Brijesh Bhanote, Director, Sales and Marketing, Lotus Greens.  

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