India sees rise in volumes for FY18-19

India's cement industry saw a 13.6 per cent YoY increase in volume to 275.7Mt in the first 10-months of FY18-19, driven largely by rural and affordable housing, according to a report by ICRA. The growth was almost double the seven per cent forecast, however ICRA has stated that the increase is unlikely to translate into profit growth or improved margins due to the lack of any significant price increase and cost pressures placed on producers.

At the pan-India level, prices in most markets were 3-8 per cent lower between April 2018-February 2019 compared to the previous year. However, input costs have eased in recent months largely because of lower power and fuel expenses. In addition, cement prices increased in February and have reportedly remained steady in March.

"We expect volume growth at eight per cent for the FY20, driven largely by rural and affordable housing demand and improved focus on infrastructure segments—mainly road, metro and irrigation projects," said Sabyasachi Majumdar, group head of corporate sector ratings, ICRA. "On the capacity side, we expect around 17-18Mta to get added in 2019-20."