Indian cement consumption to rise by 7-8 per cent in FY19-20

Rating agency ICRA forecasts that domestic cement demand in India will grow seven per cent YoY in FY19 and by around eight per cent in FY20, driven mainly by rural and affordable housing projects as well as larger infrastructure projects for roads, irrigation and metro development.

The agency estimates a cement supply rise of approximately 15-18Mta in FY19-20. "The domestic cement capacity utilisation is expected to remain moderate at around 70 per cent in FY20 despite an estimated demand growth of 7-8 per cent in FY19-20 due to capacity overhang. This is likely to continue pricing pressures, thereby leading to pressure on margins," said ICRA.

"While the incremental demand of around 22-26Mt is greater than the incremental supply, the capacity overhang is likely to keep the utilisation at moderate levels, 67 per cent in FY19 and 70 per cent in  FY20," added ICRA.