Indian cement demand forecast to see growth of 8-9% in FY24

India Ratings and Research (Ind-Ra) has forecast India’s cement demand to grow by between 8-9 per cent YoY in FY24, driven by the government’s infrastructure push ahead of the general elections in 2024. A resilient agricultural sector, supported by four consecutive normal monsoons, along with a focus on the completion of affordable housing projects are expected to boost cement demand, albeit at a lower rate as inflationary pressures continue. However, an adverse weather event such as El Nino impacting monsoons could pose a downside risk, warns Ind-Ra.

Ind-Ra has maintained a ‘neutral’ outlook on the country’s cement sector for FY24, in view of "robust demand fundamentals, some recovery in profitability and comfortable balance sheets", and a ‘stable’ rating outlook for its cement portfolio for FY24.

Capacity utilisation rates are expected to remain below 70 per cent as the sector continues to see a spate of capex announcements in anticipation of the medium-term demand growth and market share gains.