The Indian cement sector appears to have shrugged off the impact of demonetisation but 1QFY18 figures suggest recovery will be slow. However, confidence is starting to build on the back of a pick-up in demand from rural and semi-urban regions, while pricing improvements have led to improved profitability for the country’s leading producers.
With the effect of demonetisation having reduced considerably during the first quarter of FY18 (April-June 2017), the cement industry recorded its first rise in production in May 2017 following five consecutive months of decline. Although output rose, the increase was disappointing at less than two per cent in a month which falls during the country’s peak construction season. Moreover, growth could not be sustained and in June, without output retreating into negative territory once again.
