Housing
constitutes two- thirds of Indian cement demand, with rural housing accounting
for 40% of the total.
Buoyed by increased
demand from housing & infrastructure sectors, India's cement consumption is
likely to expand by 7% in 2013-14, financial services company Credit Suisse on
recently said in a report.
HIGHLIGHTS OF Credit
Suisse Report...!
** The demand growth for
the building material may be higher from next fiscal onwards at 7 to 8 %,
though the drivers might change, it added.
** With strong growth
expected in rural housing, roads & railways, expect cement demand growth to
improve from five per cent in 2012-13 to 7% in 2013-14..
** The recovery would
be driven by growth in rural housing & pick-up in roads & railways
investment.
** Housing
constitutes two thirds of Indian cement demand, with rural housing accounting
for 40% of the total.
** Expect cement
demand from housing to grow at an eight per cent CAGR, with the bulk of growth
coming from rural India," it said.
** Cement demand from
rural India would grow on central and state government schemes and individuals
upgrading houses to 'pucca' houses with their own resources.
** Government
spending on Indira Awas Yojna (IAY) was weak in 2012-13 where only 80% of the budget
was spent as the allocation increase per household from Rs. 45,000 to Rs 70,000
was applicable from 1 April 2014. Therefore, expect 2013-14 demand to be
strong.
** Roads & Railways are still growing in double digits,
the report said, adding that demand growth from irrigation and power remains
muted.
** With the
expectation of 7% demand growth, we build in an accretive price increase &
margin recovery in 2013-14.
** Expect IAY demand to normalise to 6 to 7%
CAGR although strong rural wage growth of more than 15% should continue to
drive non - IAY housing growth.
** NHAI initiatives to revive demand in the road
sector should accelerate demand from roads in 2014-15.
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